The coronavirus pandemic has led Germany’s economy – like the global economy – into a recession. However, the 2020 interim projection, which was published in early September by the Federal Ministry for Economic Affairs and Energy, shows that the worst fears have not materialised and that the economy is recovering faster than expected. The recession in Germany has already bottomed out.
Three times a year, the Federal Government submits a projection for Germany’s overall economic development under the lead responsibility of the Federal Ministry for Economic Affairs and Energy. The annual projection is published by the Federal Government each January as part of the Annual Economic Report. The spring and autumn projections serve as a basis for the Working Party on Tax Revenue Forecasting to estimate the tax revenues. The budgets of the Federal Government, the Länder, municipalities and social insurance funds are based on the key overall economic figures that are forecast. The information provided to the European Union in the context of the Stability and Growth Pact is also based on these projections.
The 2020 interim projection falls outside the usual series of projections. It will form the basis for the next tax revenue forecast in September, thus providing a solid foundation for the 2021 budget.
The Federal Government forecasts short-term and medium-term economic development and the production potential. These estimates serve as the 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. You can find projections from preceding years in the Archive (in German).
Key figures of the 2020 interim projection
| Gross domestic product by expenditure (price adjusted) | 2019 | 2020 | 2021 |
|---|
| Year-on-year change (in per cent) | |
| Gross domestic product [1] | 0,6 | -5,8 | 4,4 |
| Private consumption [2] | 1,6 | -6,9 | 4,7 |
| Public-sector consumption | 2,7 | 4,8 | -0,4 |
| Gross fixed capital formation | 2,5 | -3,7 | 5,2 |
| - of which equipment | 0,5 | -16,5 | 12,0 |
| - buildings | 3,8 | 3,8 | 2,4 |
| - other investment | 2,7 | -1,7 | 3,1 |
| Changes in inventories and net acquisition of valuables (contribution to GDP growth) | -0,7 | 0,0 | 0,0 |
| Domestic demand | 1,2 | -3,6 | 3,6 |
| Exports | 1,0 | -12,1 | 8,8 |
| Imports | 2,6 | -8,1 | 7,5 |
| Net foreign demand (contribution to GDP growth) [3] | -0,6 | -2,3 | 0,9 |
| Private consumption [2] | 1,3 | 0,5 | 1,2 |
| Gainfully active persons (domestic) | 45,3 | 44,9 | 45,1 |
| Unemployed persons (Federal Employment Agency) | 2,27 | 2,69 | 2,58 |
[1] In 2020, calendar-adjusted growth is 6.1%, the rate over the course of the year is 4.9%.
[2] Including non-profit-making organisations.
[3] Absolute change in net foreign demand in per cent of pre-year GDP (= contribution to change in GDP).
