The German economy again grew strongly in the first quarter of 2018. Gross domestic product expanded by 0.3% (price-adjusted) compared to the previous quarter. As expected, the rate dipped below what was for the German economy a rather high average quarterly growth rate of 0.7% in 2017. Demand for industrial products both from Germany and from outside the eurozone was lower than in the previous quarter, resulting in a drop in exports. On top of this, certain special factors impacted temporarily on growth. In addition to the wave of influenza, the increased number of strikes and the early dates of the Easter holidays, a significant role must also have been played by the fact that the Federal Government was running a provisional budget. There are certainly a variety of reasons for the weaker foreign demand. It is currently hard to estimate the extent to which a role was played by any uncertainty caused by the tougher rhetoric on foreign and trade policy of the U.S. administration from the beginning of the year. In overall terms, however, the German economy is continuing its upswing. The global economy basically remains in good shape, and the German economy remains growth-oriented, for example in terms of its demand for labour. It is true that the relevant business climate indicators are not quite as positive as at the beginning of the year, but their above-average level argues clearly in favour of a continuation of the upswing, albeit perhaps at a slightly different pace.
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. 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 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 in the 2018 spring projection
| GDP by expenditure (adjusted for price) [1] | 2017 | 2018 | 2019 |
| Year-on-year change (in per cent) | |||
| Gross domestic product | 2.2 | 2.3 | 2.1 |
| Private consumption [2] | 1.9 | 1.7 | 1.8 |
| Public-sector consumption | 1.5 | 2.6 | 1.8 |
| Gross fixed capital formation | 3.3 | 3.7 | 3.6 |
| - of which equipment | 4.0 | 5.5 | 4.8 |
| - buildings | 2.7 | 2.6 | 2.7 |
| Domestic demand | 2.2 | 2.3 | 2.2 |
| Exports | 4.7 | 5.0 | 4.4 |
| Imports | 5.1 | 5.8 | 5.1 |
| Price trend: | |||
| Private consumption [2] | 1.7 | 1.8 | 2.0 |
| Gross domestic product | 1.5 | 1.9 | 2.0 |
| Gainfully active persons (domestic) | 1.5 | 1.3 | 0.9 |
| By way of information: | |||
| consumer price index | 1.8 | 1.8 | 2.0 |
| absolute figures (millions) | |||
| Gainfully active persons (domestic) | 44.3 | 44.9 | 45.3 |
| Unemployed persons (Federal Employment Agency) | 2.53 | 2.33 | 2.24 |
[1] Up to 2017 provisional figures from the Federal Statistical Office; as of February 2018
[2] Including non-profit-making organisations
