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Topic - Economic Situation and Cyclical Development

Economic and Cyclical Development

Introduction

The German economy is in very good shape. In 2016, the gross domestic product expanded by 1.9% (price-adjusted), faster than in any year since 2011. The good economic situation will continue in 2017. The Federal Government expects the growth trend to continue this year with a 1.4% increase in the price-adjusted gross domestic product.

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) [1]201520162017
Gross domestic product1,71,91,4
Private consumption [2]2,0 2,01,4
Governement consumption2,7 4,22,3
Gross fixed capital formation1,7 2,5 1,7
of which: machinery and equipment3,7 1,71,2
Construction0,3 3,1 1,9
Domestic demand1,6 2,2 1,6
Exports5,2 2,5 2,8
Imports 5,5 3,4 3,8
Price trend:
Private consumption [2]0,60,61,7
Gross domestic product2,0 1,41,4
Gainfully active persons (domestic)0,91,00,7
For information: Consumer price index0,30,51,8
absolute figures (millions)
Gainfully active persons (domestic)43,143,543,8
Unemployment (Fed Empl Agency)2,792,72,61

[1] Up to 2016 provisional figures of the Federal Statistical Office; status: January 2017;
[2] Including non-profit-making organisations.

Key figures on the situation of the German economy

1,9
Symbolicon für Wachstumskurve

Rise in gross domestic product (GDP) in per cent
in 2016 compared with the preceding year

2,5
Symbolicon für Lastenwagen

Rise in exports in per cent
in 2016 compared with the preceding year

2,5
Symbolicon für Fabrik

Rise in gross fixed capital formation in per cent
compared with the preceding year

1,0
Symbolicon für Arbeiter

More gainfully active persons in per cent
in 2016 compared with the preceding year

Current situation

The economic situation in Germany in January 2017

The German economy grew by 1.9% in 2016. Economic activity picked up at the end of the year. Global economic growth has risen slightly, leading to an increase in exports. Output in the goods-producing industry is likely to have risen noticeably in the final quarter of the year. New orders and indicators of market sentiment were indicative of a good start to 2017. The labour market developed positively in 2016 and continues to steadily boost consumer spending.

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. [1] [2] 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.

For more information about the economic situation in January, please click here.

Latest press releases

Press releases

  • 11/10/2017 - Press release - Economic Situation and Cyclical Development

    Press release: Zypries: German economy has picked up speed – growth set to continue in the coming years

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  • 13/07/2017 - Press release - Economic Situation and Cyclical Development

    Press release: The economic situation in Germany in July 2017

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Further information

Graph on the subject of Economic Development; Source: istockphoto.com/jxfzsy