ifo Dresden berichtet 1/2016

Germany forecast 2016/2017: Restrained upswing continues

The restrained upswing in the German economy continues. Real gross domestic product is expected to have increased by 1.7% in 2015. This year it is expected to rise by 1.9 %. In the coming year, the growth rate is expected to fall back to 1.7 %. Private consumption will continue to be the pillar of the upswing, driven by the renewed drop in crude oil prices and rising labour and transfer incomes. In addition, financial and social policy is increasing its expansive impulses, with the significant rise in government consumer spending and transfers in the wake of refugee migration making a significant contribution to this. While construction investments are likely to expand more strongly again in the forecast period, investments in plant and equipment will increase only moderately despite the favorable financial conditions. Since imports will grow more strongly than exports in view of the expected strong domestic demand, foreign trade will provide almost no impetus.

Nierhaus, Wolfgang