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German Economy to Overcome Temporary Weakness

Press Release of December 17, 2014

The German economy has veered back on an upward course, after weak growth in the summer semester 2014. In this projection, real GDP is estimated to grow by 1.5 percent in 2014, by 1.4 percent in 2015 and by 1.7 percent in 2016. Inflation is projected to remain low, with 0.9 percent in 2014, 0.7 percent in 2015 and 1.4 percent in 2016. The growth rate of the global economy rose slightly in the third quarter. The gradually improving situation on labor markets will lead to increasing incomes in the forecast period, particularly in advanced economies. Along with continuously low energy prices, this should stabilize purchasing power and thus private consumption and investments. The average annual growth rate of the world economy is expected to be 3.4 percent in 2014, 3.8 percent in 2015 and 3.9 percent in 2016. Inflation is predicted to linger between a moderate two and three percent in the projection period. Economic developments in Germany are supported by foreign demand, which also stimulates investment going forward. Private consumption is increasing noticeably; this is based on a persistently positive situation on the labor market, high wage growth, as well as strong increases in social benefits. In addition, declining energy prices are raising purchasing power significantly, as well as driving up company profits.