Federal Minister Brigitte Zypries in the press conference presenting the autumn projection

Federal Minister Brigitte Zypries in the press conference presenting the autumn projection

© BMWi/Susanne Eriksson

The German economy is experiencing a steady, broad-based upswing solidly rooted in the domestic economy. Capacity utilisation levels are good, employment is continuing to rise, and consumer prices are stable. In its autumn projection, the Federal Government expects a price-adjusted rise in GDP of 2.0% this year, followed by 1.9% in 2018.

Economic Affairs Minister Brigitte Zypries said: “The German economy is doing well. The next Federal Government needs to make sure this remains the case. The upswing in the German economy has accelerated and broadened, and growth is set to continue in the coming years. As the global economy recovers, exports have picked up speed. This has stimulated private-sector investment. Employment is continuing to rise strongly. The last legislative term saw the number of people in work rise by 2.5 million. Incomes are continuing to increase. I believe it is important for everyone to benefit from the good economic development.”

Here are some of the main points highlighted in the government’s 2017 autumn projection:

  • Working from projections by international organisations, it is assumed that the global economy will pick up speed. World trade is also likely to continue its dynamic development. For this reason, German exports of goods and services are expected to expand by 3.5% in real terms in 2017 and by 4.0% in 2018.
  • Due to the dynamic development in domestic demand, imports are likely to rise rather faster than exports in 2017 and 2018. For this reason, foreign trade will not contribute to growth on balance in arithmetical terms in the projection period. At the same time, the development of foreign trade continues to be of fundamental importance for Germany’s economic development.
  • The balance on the current account (in relation to nominal GDP) is likely to fall, not least due to the strong domestic demand, from 8.3% in 2016 to 7.4% in 2018.
  • The clear rise in exports and the above-average level of capacity utilisation in industry will cause companies to significantly increase their investment activity. Investment in equipment will probably rise by 2.0% this year, and by 3.7% next year.
  • In view of low interest rates and high demand for housing, the business environment for investment in construction remains good. For this reason, investment in construction will provide a sharp stimulus. It is likely to grow by 4.3% in 2017 and by 3.4% in 2018.
  • The clear rise in employment and faster rises in wages will result in higher spending on consumption by private households. Consumer spending will increase by 1.8% in real terms this year. In 2018, private households are likely to consume 1.6% more than in the previous year.
  • The number of people in work is expected to grow very strongly, by 660,000 this year and by 495,000 in 2018, reaching a record level of 44.8 million in 2018. In view of the high demand for labour, a further drop in unemployment of 155,000 people is expected this year, and of 70,000 next year. Unemployment is set to fall to 2.5 million people, or a rate of 5.5% – despite the many people who have come to Germany.
  • The level of consumer prices will temporarily see a quicker increase of 1.8% in 2017, primarily due to rising prices for energy and foodstuffs, and another rise of 1.6% in 2018, following 0.5% in 2016.

The final consultations on the Federal Government’s Autumn Projection were concluded on 11 October 2017 within the framework of the Interministerial Working Group on Macroeconomic Forecasting, which was chaired by the Federal Ministry for Economic Affairs and Energy. The Federal Statistical Office and the Deutsche Bundesbank were also involved. The key macroeconomic figures contained in the Autumn Projection form the basis for the tax revenue forecast, which will be compiled in Braunschweig on 7 to 9 November 2017. These figures provide a general framework for drafting the budgets of the Federal Government, the Länder, municipalities and social insurance funds.

Key figures in the 2017 autumn projection

GDP by expenditure (price-adjusted) [1]201620172018
Percentages changes from preceding year
Gross domestic product1.92.01.9
Private consumption [2]2.11.81.6
Government consumption3.71.61.7
Gross fixed capital formation3.13.53.6
of which: machinery and equipment2.22.03.7
Construction2.74.33.4
Domestic demand2.42.22.1
Exports2.63.54.0
Imports3.94.44.7
Price trend:
Private consumption [2]0.61.71.5
Gross domestic product1.31.51.7
Gainfully active persons (domestic)1.31.51.1
For information:
consumer price index
0.51.81.6
absolute figures (million persons)
Gainfully active persons (domestic)43.644.344.8
Unemployment (Fed Empl Agency)2.692.542.47

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