Sigmar Gabriel, Federal Minister for Economic Affairs and Energy, presented the Annual Economic Report 2016; Source: BMWi/Andreas Mertens Enlarge

Sigmar Gabriel, Federal Minister for Economic Affairs and Energy, presented the Annual Economic Report 2016

© BMWi/Andreas Mertens

The Federal Cabinet today adopted the Federal Government's 2016 Annual Economic Report entitled "Making Germany fit for the future - taking the opportunities of digital transformation". The German economy is continuing its sound growth despite the fragile international environment. Germany's gross domestic product is likely to expand by 1.7% (adjusted for prices) this year. The level of gainful employment increased further last year. With around 43 million people in work, a new employment record was achieved for the ninth time in succession. This expansion of employment, together with the appreciable rises in income, forms the foundation of the ongoing dynamism in Germany's domestic economy. Further cyclical stimuli are deriving from private-sector investment in house-building.

Sigmar Gabriel, Federal Minister for Economic Affairs and Energy, said: "Germany's much-envied economic strength is not least proof of a successful economic and employment policy. But it is no guarantor of future prosperity. We are currently experiencing a phase of change and upheaval. Global competitive pressures are not diminishing, and the demographic trend is causing a decrease in the active labour force. We now need to put the policies in place for the future so that Germany will still be a high-performance, world-beating base for industry and commerce in ten years' time. To achieve this, we need to modernise our economy and increase the rate of private-sector and public-sector investment. Since this government took up office, we have been working very hard to boost the forces for growth and innovation in the economy and to expand social security and environmental sustainability."

Eckwerte der gesamtwirtschaftlichen Entwicklung in der Bundesrepublik Deutschland [1]2014 2015Jahres-
projektion
2016
Veränderung gegenüber
Vorjahr in Prozent, soweit
nicht anders angegeben
ENTSTEHUNG des Bruttoinlandsproduktes (BIP)
BIP (preisbereinigt)
Erwerbstätige (im Inland)
Arbeitslosenquote in Prozent (Abgrenzung der Bundesagentur für Arbeit) [2]

1,6
0,9
6,7

1,7
0,8
6,4

1,7
0,9
6,4
VERWENDUNG des BIP preisbereinigt (real)
Private Haushalte und private Organisationen ohne Erwerbszweck
Ausrüstungen
Bauten

0,9
4,5
2,9

1,9
3,6
0,2

1,9
2,2
2,3
Inlandsnachfrage1,31,62,3
Exporte
Importe
Außenbeitrag (Impuls) [3]
4,0
3,7
0,4
5,4
5,7
0,2
3,2
4,8
-0,4
Bruttolöhne und -gehälter je Arbeitnehmer2,72,92,6

[1] Bis 2015 vorläufige Ergebnisse des Statistischen Bundesamtes; Stand: Januar 2016.
[2] Bezogen auf alle Erwerbspersonen.
[3] Absolute Veränderung der Vorräte bzw. des Außenbeitrags in Prozent des BIP des Vorjahres (= Beitrag zur Zuwachsrate des BIP).

The large influx of refugees will not initially have a significant impact on the labour market. Despite the additional expenditure due to immigration, the debt-to-GDP ratio will drop below 70% of GDP this year. The rapid integration into the labour market of refugees who have good prospects of permanent residency is of key significance. The Federal Government adopted a large number of measures to achieve this last year. At the same time, innovation and investment in future viability are gaining in importance. A key role is played by digitisation, which is increasingly impacting on the economy and society.

Minister Gabriel said: "The economy and society are experiencing a far-reaching process of technological transformation. Anyone wishing to grasp the opportunities of digitisation must regard it as a task to be tackled proactively. The Federal Government is helping the business community to move to new business models, "Industrie 4.0" and smart services. To do this, we have set up targeted funding programmes, are expanding digital infrastructure, and are developing a modern regulatory framework. Together with better digital education and control over one's own data, a modern regulatory framework is also a prerequisite for social change."

In order to enable the rate of growth to be maintained in the future, and to further boost the potential gross domestic product, the Federal Government is increasing investment by the Federation, and at the same time is helping the Länder and municipalities by providing them with more than €45 billion up to 2019. This will create further scope for investment by those levels of government. Also, the Federal Government is taking numerous measures to stimulate private-sector investment. For example, it is continuing to prune red tape and to pursue its strategy of improving the (tax) rules for venture capital and start-ups in Germany. The energy transition is another key economic policy project. Not least, the Federal Government is making the funding provided under the Renewable Energy Sources Act more efficient and is developing the electricity market further in the Electricity Market Act.

You can find the Annual Economic Report here (in German).
An explanatory overview of the main priorities can be found here (in German).