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Economy

Analyses of the German Economy and Forecasts

Forecasting growth in Germany and analyzing the country’s economy as a whole as well as segments of it are central parts of DIW Berlin’s work. Here you can find the institute’s economic growth projections, publications on the distribution of income and wealth, and analyses of specific German economic policies.
DIW Weekly Report 37 / 2021

German Economy Only Slowly Emerging from the Pandemic: DIW Economic Outlook ...

The German economy is taking longer than expected to overcome the pandemic: It is likely to increase by only 2.1 percent in 2021 and capacities remain markedly underutilized. In addition, global supply bottlenecks are affecting German industry, resulting in stalled domestic production despite high demand. Following a profitable summer due to low case numbers and progress in the vaccination campaign, ...

DIW Weekly Report 23/24 / 2021

German Economy: Uncertainty Remains despite Rebound: DIW Economic Outlook Summer ...
DIW Weekly Report 11 / 2021

German Economy between Lockdowns and Normality: DIW Economic Outlook Spring 2021
Blog Marcel Fratzscher

Germany’s economic model is not the problem
DIW Weekly Report 1/2 / 2020

Construction Industry an Important Pillar of the Economy: Investment Assistance Taking Effect

The construction industry is increasingly becoming a key pillar of the business cycle in Germany. DIW Berlin’s construction volume calculation indicates a real expansion of construction services by around three percent each year over the next two years. In nominal terms, sales in the construction industry and its related sectors will grow by around 6.5 percent in 2020 and almost six percent in 2021. ...

2020| Martin Gornig, Claus Michelsen, Laura Pagenhardt
DIW Weekly Report 49/50 / 2019

German Economy: Industry Struggles to Shake of the Crisis: DIW Economic Outlook

The German economy remains weak as of the fourth quarter of 2019. However, although industrial production is continuing its downward trend, there are signs of a slow recovery. The manufacturing sector is likely to expand production gradually beginning in 2020; therefore, it is less likely the recession in the industry will affect the service sector and construction industry. These sectors are profiting ...

2019| Claus Michelsen, Marius Clemens, Max Hanisch, Simon Junker, Laura Pagenhardt, Thore Schlaak
DIW Weekly Report 6/7 / 2020

From Iran to Russia to Hong Kong: Geopolitical Risks Are Weighing on the German Economy

Over the past years, there has been an increase in global geopolitical risk, the most recent example being the intensifying conflict between the USA and Iran. Such geopolitical risks also affect the German economy. A geopolitical shock, defined as an unexpected increase in risk, has a significantly negative effect on the development of the German economy, and stock prices fall. By comparison, German ...

2020| Max Hanisch
DIW Weekly Report 37 / 2019

German Economy: A Recession Is Not Automatically a Crisis: DIW Economic Outlook

The slowdown in the global economy and the uncertainties caused by Brexit have affected the export-oriented German economy, which is expected to grow by only 0.5 percent this year. However, the German economy has not slid into a crisis due to marked fiscal policy stimuli and favorable developments on the labor market. Private consumption remains a mainstay of the economy; in addition, there is moderate ...

2019| Claus Michelsen, Marius Clemens, Max Hanisch, Simon Junker, Konstantin Kholodilin, Thore Schlaak
DIW Weekly Report 37 / 2019

The Global Economy and the Euro Area: Uncertainty Weighing on World Trade and Industry: DIW Economic Outlook

The ongoing trade conflicts initiated by the US and the uncertainty surrounding Brexit are negatively affecting the global economy. Global trade and investment activity, and thus in many places industrial output, are the areas most impacted. Consumption, however, is continuing to support the economy in many countries. DIW Berlin is expecting global GDP to grow to 3.7 percent this year and to slightly ...

2019| Claus Michelsen, Guido Baldi, Geraldine Dany-Knedlik, Hella Engerer, Stefan Gebauer, Malte Rieth, Thore Schlaak
DIW Weekly Report

Income Distribution in Germany

Real Income on the Rise since 1991 but More People with Low Incomes

DIW Weekly Report 22/23/24 / 2019

German Economy Defying a Turbulent and Uncertain Environment: DIW Economic Outlook

After a turbulent summer, marked by a weak second and a likely stronger third quarter, the German economy should return to an average pace of growth and end up with a growth rate of 0.9 percent in 2019. Despite the more subdued pace, capacity utilization remains high; employment growth is continuing, albeit more slowly; and the trend of foreign demand is weakening but remains buoyant overall. In this ...

2019| Claus Michelsen, Martin Bruns, Marius Clemens, Max Hanisch, Simon Junker, Konstantin Kholodilin, Thore Schlaak
DIW Weekly Report 22/23/24 / 2019

Global Economy and the Euro Area: Protectionism Weighing on Trade and Investment: DIW Economic Outlook

The global economy is holding steady amidst uncertainty, although subdued export and investment growth in some places is already proving the extent to which protectionism and the unresolved trade conflicts are negatively affecting the economy. Contributing to the uncertainty is the continued unclear outcome of Brexit. In many countries, the domestic economy is fighting against a downturn. However, ...

2019| Claus Michelsen, Guido Baldi, Geraldine Dany-Knedlik, Hella Engerer, Stefan Gebauer, Malte Rieth
Press Release

German economy growing despite uncertainties and risks; global economy continuing to cool down

According to DIW Berlin estimates, the German economy will continue its solid growth performance in 2019 and 2020. Overall, however, the economy is cooling noticeably and production capacity utilization is returning to normal. This is primarily due to the global economy weakening; it has been strained by China’s weakening economy, trade conflicts, and political uncertainties such as Brexit. The ...

14.03.2019
Weekly Report

Construction industry momentum continues – state stimulus impacts prices

By Martin Gornig, Claus Michelsen, and Martin Bruns According to the German Institute for Economic Research construction volume forecast, the country’s construction industry will continue to flourish in the coming years. Companies can count on a rise in the nominal construction volume of around 7.5 percent in 2019 and 6.5 percent next year. The industry’s business cycle continues ...

14.01.2019| Martin Johannes Bruns, Martin Gornig, Claus Michelsen
Press Release

Immigration from other EU countries has increased Germany’s economic growth since 2011

Since 2011, over five million immigrants from other EU countries have immigrated to Germany – A DIW Berlin simulation shows that this immigration has increased GDP growth by an average of 0.2 percentage points every year – More needs to be done to improve employment opportunities for the highly qualified, for example by simplifying the procedures for recognizing foreign qualifications, ...

31.10.2018
DIW Weekly Report 37 / 2018

Inequality of Earnings in Germany Generally Accepted but Low Incomes Considered Unfair

Earnings differences are a recurring topic of public discussion in Germany. Data from the long-term Socio-Economic Panel (SOEP) study as well as a separate survey of German employees (LINOS) show that earnings inequalities are generally perceived as fair while a substantial share of the respondents find the current earnings distribution in Germany unfair. This applies above all to the middle and lower ...

2018| Jule Adriaans, Stefan Liebig
Press Release

Joint economic forecast autumn 2018: Upturn loses momentum

Press release of the project group "Gemeinschaftsdiagnose": German Institute for Economic Research (DIW Berlin), Halle Institute for Economic Research (IWH), ifo Institute, Kiel Institute for the World Economy (IfW), RWI - Leibniz Institute for Economic Research

27.09.2018
DIW Weekly Report 30/31 / 2018

Signs of New Housing Bubble in Many OECD Countries – Lower Risk in Germany

Ten years after the worldwide financial and economic crisis was triggered by the American real estate market, real estate prices are rising around the globe. Concerns about a new housing bubble are growing. The present report based on OECD data for 20 countries demonstrates that this concern is not unwarranted. In eight countries, including the United Kingdom and the USA, the evolution of real estate ...

2018| Konstantin A. Kholodilin, Claus Michelsen
DIW Weekly Report 21 / 2018

Income Distribution in Germany: Real Income on the Rise since 1991 but More People with Low Incomes

Between 1991 and 2015, the real disposable, needs-adjusted income of persons in private households in Germany rose by 15 percent on average. The majority of the population has benefited from the growth in real income, but the groups at the lower end of the income distribution have not. Inequality in both market and disposable needs-adjusted household income has remained high. These are the findings ...

2018| Markus M. Grabka, Jan Goebel
DIW Weekly Report 1/2 / 2018

Construction Sector: End of the Boom at New Buildings

New residential construction, in particular apartment complexes, has driven the growth in Germany’s construction industry in recent years. In 2018 and 2019 the volume of new construction will continue to expand. However, its rate of expansion will decrease and the boom of recent years will come to an end. After years of strong growth, having even occasionally surpassed the ten-percent mark, the German ...

2018| Martin Gornig, Claus Michelsen
DIW Weekly Report 25/26 / 2018

Gigabit Access: Germany Lags behind in International Comparison but Demand Is Low

Broadband internet expansion is a topic of widespread discussion in Germany right now. But the country still has not met its own targets. Almost 100 percent of households are supplied with broadband connections with up to six megabits per second, yet Germany has lots of room to catch up when it comes to gigabit-capable connections—particularly in sparsely populated regions. On the demand side, copper ...

2018| Yann Girard, Anselm Mattes, Claus Michelsen
DIW Weekly Report 15/16 / 2018

Social Services: A Rapidly Growing Economic Sector

The social services sector has experienced growth at a far above-average pace in the past, and employment has even accelerated since the middle of the past decade. This is due to a strong increase in demand for this sector's services as a result of an aging society and from increasing tasks to solve problems in families. The influx of refugees has also affected demand. Almost everywhere in the EU, ...

2018| Karl Brenke, Thore Schlaak, Leopold Ringwald
DIW Weekly Report 36 / 2018

German Economy Remaining Robust in Uncertain Times: DIW Economic Outlook

The German economy will keep on growing amid risks although growth will slow down somewhat. GDP will continue to grow noticeably at 1.8 percent this year, 1.7 percent next year, and 1.8 percent in 2020. Private household incomes in particular—and thus consumption as well—are boosting growth, as the labor markets are improving: the unemployment rate will fall from 5.2 percent this year to well below ...

2018| Claus Michelsen, Christian Breuer, Martin Bruns, Marius Clemens, Max Hanisch, Simon Junker, Thore Schlaak
DIW Weekly Report 24 / 2018

German Economy: Slowdown in Sight

Compared to last year, the German economy is weakening noticeably. Orders from abroad are decreasing and domestic companies are holding back on investments. However, capacity utilization remains high—also because the government will boost the incomes of private households next year. However, above all, incomes are rising noticeably due to the positive situation in the labor market: the unemployment ...

2018| Ferdinand Fichtner, Christian Breuer, Simon Junker, Claus Michelsen, Thore Schlaak
DIW Weekly Report 10/11 / 2018

New Government’s Policies Give the Thriving German Economy an Additional Boost

The German economy will grow by 2.4 percent this year, especially due to strong foreign demand. Brisk investment activity continues in this economic climate; stimulus from foreign trade, however, is weakening somewhat. Despite strong consumer demand in the coming quarters, employment and economic output growth are losing momentum. However, stimulus measures from the new federal government will increase ...

2018| Ferdinand Fichtner, Karl Brenke, Christian Breuer, Marius Clemens, Simon Junker, Claus Michelsen, Thore Schlaak
Press Release

Germany’s Economic Experts Raise Forecast Slightly

Press release of the project group "Gemeinschaftsdiagnose": German Institute for Economic Research (DIW Berlin), Halle Institute for Economic Research (IWH), ifo Institute, Kiel Institute for the World Economy (IfW), RWI - Leibniz Institute for Economic Research

19.04.2018
Press Release

DIW Economic Barometer April 2018: upswing continues at a slower pace

The Economic Barometer of the German Insitute for Economic Research (DIW Berlin) remains high but is signaling a weakening of the growth rate. It reached a score of 126 points in the first quarter and 121 points in the second quarter, well above the 100-point mark that stands for average growth.

26.04.2018
Press Release

DIW Economic Barometer March 2018: economic boom continues

The German economy is expected to have gained a good 0.7 percent in the first quarter of 2018 compared to the final quarter of 2017. This is signaled by the Economic Barometer of the German Institute for Economic Research (DIW Berlin), which rose from 113 to 118 points. It is still well above the 100-point mark, which stands for average growth.

28.03.2018
Press Release

Company productivity increases with more knowledge-based capital

First study using official company records — more knowledge-based capital increases productivity — some sectors are already investing more in knowledge-based capital than in machines and buildings — economic policy must take a holistic approach towards investments Every year in Germany, around 200 billion euros are invested in knowledge-based capital, such as research and development ...

01.02.2018
Press Release

The new grand coalition’s work program: DIW Berlin says there is still much to improve

In important areas such as tax policy, education, and energy, the future grand coalition must be considerably more ambitious – The need for reform in Germany is not being addressed sufficiently Germany’s next government will most likely once again be a grand coalition. However, the results of the preliminary coalition talks between the Union parties and the SPD, which serve as a basis ...

31.01.2018
Press Release

Gross income gap has increased since reunification

The top 10% of income earners in Germany earn almost as much as the middle 40% – the top 1%’s share of national income has increased from eight to 13 percent since 1995. The share of national income belonging to the top 1% of income earners has grown significantly in Germany since the mid-1990s, while the share earned by the bottom 50% has significantly decreased. These are the main findings ...

16.01.2018
Economic Bulletin

DIW Economic Outlook: German economy booming but not to the point of overheating

The German economy continues to boom and the upswing has recently gained breadth. In addition to continuing strong consumer demand on the domestic front, the flourishing global economy is making itself felt in a growing Germany economy. In view of strong exports and abating global risks companies in capital-intensive manufacturing and processing industries are currently investing more. This activity ...

13.12.2017
Press Release

The potential for green public procurement is still largely unexploited in Germany

Public purchases can make a valuable contribution to decarbonizing the economy – Despite an upward trend, only 2.4 percent of public contracts in Germany include green criteria – Policy action is needed in order to fully exploit the potential Green public procurement, by which public authorities choose their suppliers of goods and services not only based on price but also according to ...

12.12.2017
Press Release

Higher employment rates and more money in the pension fund

Two DIW studies on the partial retirement scheme and raising the normal retirement age: simulations show positive employment effects and fiscal implications A normal retirement age that increases relative to the rise in life expectancy after 2030 could help keep the funding of the statutory pension insurance scheme stable without the pension level decreasing further. Depending on the scenario, a ...

29.11.2017
Press Release

German companies strengthen research and development – both domestically and abroad

The R&D expenditure of German companies abroad has more than doubled compared to 2003. At the same time, their domestic investments are increasing sharply – The majority of the investments can be attributed to the automotive engineering and pharmaceutical industries – The share of foreign companies in R&D investments in Germany is sinking. In recent years, German companies have ...

22.11.2017
DIW Economic Bulletin 33/34/35 / 2017

Increased Labor Market Participation Can't Do the Job of Mastering Germany's Demographic Change in the Future

In the last decade the available labor force has expanded in Germany—despite the decline in the working-age population. The reason: labor market participation has increased, for women in particular and older people in general. Also noticeable was a rise in qualification level because well-educated people have a particularly high propensity to participate in the labor market. Most recently, Germany’s ...

2017| Karl Brenke, Marius Clemens
Press Release

Joint economic forecast spring 2019: Significant Cooling of the Economy - Political Risks High

Press release of the project group "Gemeinschaftsdiagnose": German Institute for Economic Research (DIW Berlin), Halle Institute for Economic Research (IWH) – Member of the Leibniz Association, ifo Institute – Leibniz Institute for Economic Research at the University of Munich in cooperation with the KOF Swiss Economic Institute at ETH Zurich, Kiel Institute for the World Economy (IfW), ...

04.04.2019
DIW Weekly Report 12 / 2020

Coronavirus Causing Major Economic Shock to the Global Economy: DIW Economic Outlook

The ongoing corona pandemic is causing a major shock to the global economy. In the coming months, many countries are expected to suffer severe economic downturns. Sealing off entire regions disrupts supply chains, resulting in production losses and falls in consumption. The global economy is expected to grow by as little as 2.5 percent this year instead of by the 3.7 percent forecasted previously. ...

2020| Claus Michelsen, Guido Baldi, Geraldine Dany-Knedlik, Hella Engerer, Stefan Gebauer, Malte Rieth
DIW Weekly Report 12 / 2020

Coronavirus Plunges the German Economy into Recession: DIW Economic Outlook

The spread of the coronavirus worldwide is exerting considerable pressure on the economy. Compounded by the lack of quality data, model uncertainty, and uncertainty over government responses, economic forecasts are subject to even greater uncertainty than usual. It is difficult to predict how the pandemic will progress. Figures on the impact of the virus, obtained by comparing it with previous epidemics, ...

2020| Claus Michelsen, Marius Clemens, Max Hanisch, Simon Junker, Konstantin A. Kholodilin, Thore Schlaak

Topics: Business cycles

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