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Article - Economic Situation and Cyclical Development

Economic Situation and Cyclical Development


The German economy is gradually emerging from its slowdown. For 2020, the Federal Government expects an annual average increase in gross domestic product of 1.1% in price-adjusted terms. Economic dynamism remained restrained at the beginning of 2020. In the course of the year, the economy is likely to pick up some slight momentum.

The economic development is essentially split: a robust domestic economy – bolstered by rising incomes, tax relief and dynamic public-sector spending – contrasts with the cyclical weakness of export-oriented industry. In the course of the year, however, industrial production is also likely to slowly recover. The headwinds from the external economic environment will weaken as global trade recovers. In the course of the year, the cyclical dynamism of the German economy is likely to increase significantly.

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 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).

For the most recent estimate contained in the 2020 annual projection, please click here.

Key figures of the 2020 annual projection

Macroeconomic trends in the Federal Republic of Germany [1]2019Annual projection
Percentage change on preceding year unless indicated otherwise
OUTPUT side of gross domestic product (GDP)
GDP (price-adjusted)0,61,1
Gainfully active persons (domestic)0,90,4
GDP per gainfully active person-0,30,7
GDP per hour worked0,10,2
For information purposes:0,00,0
Unemployment rate in % (according to ESA) [2]3,02,9
Unemployment rate in % (as defined by Federal Employment Agency) [2]5,05,0
GDP by EXPENDITURE in current prices (nominal)
Consumption expenditure
Private households and private non-profit-making organisations2,92,7
Public sector5,04,5
Gross fixed capital formation5,44,6
Changes in inventories and net acquisition of valuables (€ bn)-10,6-12,6
Domestic demand2,93,5
Net foreign demand (€ bn)207,8196,1
Net foreign demand (in % of GDP) [7]6,05,5
Gross domestic product (nominal)2,72,9
GDP by EXPENDITURE in price-adjusted terms (real)
Consumption expenditure
Private households and private non-profit-making organisations1,61,3
Public sector2,52,3
Gross fixed capital formation2,51,7
Machinery and equipment0,40,6
Other investment2,73,0
Changes in inventories and net acquisition of valuables (contribution to GDP growth) [3]-0,90,0
Domestic demand1,01,6
Net foreign demand (contribution to GDP growth) [3]-0,4-0,4
Gross domestic product (real)0,61,1
Price trend (2015 = 100)
Consumption expenditure by private households [4]1,31,4
Domestic demand1,81,9
Gross domestic product [5]2,21,8
INCOME side of gross national income (GNI)
(Resident concept)
Employee remuneration4,53,5
Corporate and investment income-2,91,2
National income2,32,9
Gross national income2,92,9
For information purposes (resident concept):
Gross wages and salaries4,43,4
Gross wages and salaries per person employed3,22,7
Disposable income of private households2,82,8
Savings ratio in % [6]10,911,0

[1] Up to 2019 provisional figures from the Federal Statistical Office; current as at January 2020
[2] In relation to the total labour force
[3] Absolute change (stocks/external balance) in % of GDP in preceding year (= contribution to change in GDP)
[4] Year-on-year changes in the consumer price index: 2019: 1.4%; 2020: 1.5%
[5] Year-on-year changes in unit labour costs per person employed: 2019: 3.6%; 2020: 2.2%
[6] Savings in % of disposable income of private households, including occupational pensions claims
[7] Current-account balance: 2019: +7.4%; 2020: +6.7%

Key figures on the situation of the German economy

Symbolicon für Wachstumskurve

per cent rise in gross domestic product (GDP)
in 2020 compared with the preceding year

Symbolicon für Lastenwagen

per cent rise in exports
in 2020 compared with the preceding year

Symbolicon für Geld

per cent rise in consumer spending
in 2020 compared with the preceding year

Symbolicon für Arbeiter

thousends more people in work
in 2020 compared with the preceding year

Current situation

The Economic Situation in the Federal Republic of Germany in April 2020

The coronavirus pandemic has led the global economy into recession. Germany, too, will see a decline in its economic output. It is difficult to predict how the situation will develop in the near future. During the second half of the year, however, the economy is expected to start recovering. The measures taken by the Federal Government are helping to minimise the economic impact of the crisis. In the industrial sector, orders, output, and sales had recovered by the beginning of the year. However, the massive drop in supply and demand both within Germany and abroad caused by the coronavirus pandemic reversed the upward trend. Industrial activity is likely to fall sharply in March and in the second quarter of the year. Social lockdown measures have put constraints on a large number of services. Likewise, consumer spending has seen a drastic decline. The coronavirus pandemic is affecting the labour market. There has been a massive increase in notifications of short-time work. Well over a million employees are affected. The rise of employment will not continue, unemployment will rise.


Since March, the German economy has been suffering a recession which is likely to last until the middle of the year. In Germany and around the world, the economy is in distress as a result of the pandemic. The collapse in global demand, interruptions in supply chains, changes in consumer behaviour, and a climate of mistrust among investors are having massive repercussions on Germany. The lockdowns imposed in many places around the world to protect public health and save lives are hitting not only industry, but also many services sectors. In Germany, lockdown measures came into effect gradually, starting in mid-March. For this reason alone, even the first quarter is likely to register a marked decline in its economic output average. The trend is expected to continue and gain momentum throughout April. Even if some of the lockdown measures were subsequently eased, the economy would remain subdued and only gradually recover.

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

Latest press releases

Press releases

  • 17/04/2019 - Press release - Economic Situation and Cyclical Development

    Minister Altmaier: Slow period is over, but should serve as a warning: we need to keep improving the business environment.

    Open detail view
  • 30/01/2019 - Press release - Economic Situation and Cyclical Development

    Minister Altmaier: To develop the economy, we need to focus on stimulating growth and on technologies for the future

    Open detail view

Further information

Graph on the subject of Economic Development; Source: