Spring Economic Forecast

May, 2018

The Federal Government released its 2018 spring economic forecast, which predicts 2.3 percent GDP growth for 2018 and 2.1 percent growth for 2019. This follows growth of 2.2 percent in 2017, the strongest in six years. Although acknowledging uncertain current developments in international trade relations and how this could potentially impact Germany, a leading export nation, Federal Minister for Economic Affairs and Energy Peter Altmaier stressed that the German economy remains buoyant and that “the upswing is continuing.” Among the positive indicators he cited during a press conference were the full order books of German manufacturers, strong corporate investment and forecasts that Germany will enjoy both a record high in employment and a record low in unemployment in 2019. According to Altmaier, when combined with rising incomes, these new jobs will further stimulate domestic consumer demand.
In their Joint Economic Forecast, released in mid-April, Germany’s leading economic experts slightly raised their forecasts for 2018 and 2019. The forecast for 2018 rose from 2.0 to 2.2 percent, and for 2019 from 1.8 to 2.0 percent. “The pace of economic expansion … remains brisk; the upturn in the world economy will continue to stimulate exports; and the domestic economy is also expected to remain buoyant thanks to the exceptionally favorable situation in the labor market,” the experts noted in a joint statement.