ifo Dresden berichtet 4/2016

Germany forecast 2016/2017: Upswing without tensions

The robust upswing in the German economy since 2014 will continue. Real GDP growth is expected to be 1.8 % in the current year and 1.6 % in 2017. As a result, the output gap will continue to narrow and be virtually closed in 2017. Since the pace of the economy as a whole is rather subdued, there are no signs of overheating on the goods and factor markets. The buoyant domestic demand is making a decisive contribution to growth. Private consumer spending is expanding against the backdrop of favourable employment growth and higher transfer incomes. The continuing favourable financing conditions are providing positive impetus for investment in equipment and construction. In addition, demand for housing is benefiting from the ongoing migration of refugees. Foreign trade is not providing any noteworthy impetus in the forecast period: exports and imports are likely to expand at a similar pace.

Nierhaus, Wolfgang