In 2016, the German economy posted solid growth of 1.9% in an unsteady external economic environment, following a 1.7% increase in GDP in the previous year.   Economic growth was thus slightly stronger than predicted in the German government’s autumn projection. In statistical terms, this development was driven by domestic demand. Government and private spending, in particular, but also construction investment rose considerably. Investment in equipment rose as well, albeit to a lesser extent. Driven by strong domestic demand, imports rose more strongly than exports, resulting in foreign trade making a slightly negative contribution to growth.
Three times a year, the Federal Government submits a projection of the overall economic development in Germany under the lead responsibility of the Federal Ministry for Economic Affairs and Energy. January's annual projection is part of the Federal Government's Annual Economic Report. The spring and autumn projections serve as basis for the Working Party on Tax Revenue Forcasting to estimate the tax revenues. The budgets of the Federal Government, the Länder, municipalities and social insurance funds are based on the forecast key overall economic figures. Information provided by the European Union in the context of the Stability and Growth Pact is also based on these projections.
The Federal Government forecasts the economic development in the short term and in the medium term and the production potential. These estimates serve as basis for the calculation of the maximum annual net new borrowing in the context of the 'debt brake' under Articles 109 and 115 of the German Basic Law.
Key figures of the 2017 annual projection
|GDP by expenditure (price-adjusted) ||2015||2016||2017|
|Gross domestic product||1,7||1,9||1,4|
|Private consumption ||2,0||2,0||1,4|
|Gross fixed capital formation||1,7||2,5||1,7|
|of which: machinery and equipment||3,7||1,7||1,2|
|Private consumption ||0,6||0,6||1,7|
|Gross domestic product||2,0||1,4||1,4|
|Gainfully active persons (domestic)||0,9||1,0||0,7|
|For information: Consumer price index||0,3||0,5||1,8|
|absolute figures (millions)|
|Gainfully active persons (domestic)||43,1||43,5||43,8|
|Unemployment (Fed Empl Agency)||2,79||2,7||2,61|
 Up to 2016 provisional figures of the Federal Statistical Office; status: January 2017;
 Including non-profit-making organisations.