Rösler on the spring projection: "Germany's economy is picking up speed again"

Dr. Philipp Rösler, Federal Minister of Economics and Technology

© BMWi

In its spring projection, the German government expects real GDP to grow by 0.7% in 2012 and by 1.6% in 2013.

Philipp Rösler, Federal Minister of Economics and Technology, stated: "Germany's economy is picking up speed again. Growth of 0.7%, higher incomes and higher employment all show that Germany is doing well. And it is also encouraging to note that economic dynamism is increasing in the course of this year. The German economy will grow faster next year than this year. Germany continues to be the engine for growth in Europe.

The domestic economy is continuing to drive the growth. Here, a special role is played by the extremely positive development on the labour market. The slow-down in growth seen in recent months has not stopped the rise in employment; the upward trend is continuing. The joint efforts by the Federal Government, companies and employees are bearing fruit, as is the responsible approach taken by the parties to collective bargaining."

Here are some of the main points in the spring projection:

• More people are earning a working wage than ever before. Gainful employment will continue to rise substantially. At the same time, the average number of unemployed in the coming two years will drop further by a total of almost 200,000 people. This means that the unemployment rate is dropping to 6.7% this year and 6.5% next year.
• The growth in disposable income this year will be 3.3%. Next year, it will expand by a further 3.1%. That means that disposable income will record its strongest increase for 10 years in four successive years.
• Consumer spending continues to be the main pillar of growth, even if the higher rise in prices this year will put the brakes on consumption in real terms.
• The slow-down in growth in the winter half-year mainly affected the level of exports. Our European export markets in particular are seeing a weaker development at present. German exports will grow by 3.0% this year, less strongly than in 2011. Next year, their growth will again be appreciably higher, at 5.0%. In view of the dynamism of the domestic economy, imports will rise faster than exports in both years. This will also boost our trading partners.

Minister Rösler commented: "Even if the German economy is extremely well positioned, we have deliberately kept our projection on the cautious side. After all, the risks from the international environment remain high. The European sovereign debt crisis is not yet resolved. We have made substantial progress towards a European union of stability by concluding the fiscal compact. The positive developments in Germany show that budget consolidation and bold structural labour-market reforms pay dividends. That is also an important message to our partners in Europe. The sharp rise in oil prices shows that higher prices can start to pose a risk to the upswing. Here, economic policy, fiscal policy and monetary policy must remain vigilant. The ECB has our support so that it can return to its normal monetary policy mode and concentrate on its clear mandate to safeguard the stability of the price level."

The final consultations on the Federal Government's spring projection were concluded on 25 April 2012 within the framework of the Interministerial Working Group on Macroeconomic Forecasting, which is chaired by the Federal Ministry of Economics and Technology. The Federal Statistical Office and the Deutsche Bundesbank were also involved.

The key macroeconomic figures contained in the spring projection form the basis for the tax revenue forecast, which will be compiled in Frankfurt (Oder) on 8-10 May 2012. These figures provide a general framework for drafting the budgets of the Federal Government, the Länder, municipalities and social insurance funds.

[1] Up to 2011, preliminary figures from the Federal Statistical Office as of 24 February 2012
[2] Including all non-profit-making organisations