Skip to content!

The Upturn Continues

Press Release of June 17, 2014

The German economy is expected to grow by 1.8 percent in 2014, keeping that pace in 2015, at a rate of two percent. GDP is expected to grow during the forecast period at rates only slightly above the trend; the slight under-utilization will therefore decrease correspondingly slowly. Inflation remains weak. Global economic growth was weaker at the start of the year. In both the industrialized and emerging countries, rates of expansion have decreased. Monetary policy orientation will remain globally expansive during the forecast period. The restrictive stimuli of financial policy in industrialized countries will diminish. After a weak start to the year, the pace of growth in global economic development should accelerate somewhat. In the short term, catch-up effects in the US will become particularly evident. Later, the gradually improving situation on the labor markets of industrialized countries in conjunction with continued low inflation rates should bolster real earnings. This is likely to stimulate consumption and, as a consequence, corporate investment activity. Overall, the average annual growth rate of the world economy in 2014 and 2015 will reach 3.5 and 3.9 percent respectively. The rate of inflation is likely to be around three percent in this period. In this environment, the German economy will continue its uptrend, albeit only at rates slightly above potential growth, as the industry will expand only moderately. The previously robust growth in the service sector may be further stimulated by a tangible increase in private consumption expenditure. Equipment investment and exports will increase significantly again going forward. There has been a marked increase in the number of employed people and employment should continue to rise noticeably. All in all, unemployment will recede in both 2014 and 2015 to 2.88 million and 2.83 million respectively and the unemployment rate will decline in both years, to 6.6 and 6.5 percent, respectively. The overall public budget will also show a surplus in both years. This year it is likely to be as high as it was last year (0.2 percent in relation to nominal GDP) and next year it will then increase significantly to 0.7 percent.

Links

keyboard_arrow_up