2017 is expected to end with a real growth rate of GDP of 2.2%, which is slightly higher than the GWS outlook of January 2017. The reason for this growth rate was mainly due to very dynamic domestic consumption expenditures – induced by both, private and public demand. Additionally, positive growth shares of fixed investment – and especially building investment – and net exports added to the very good economic performance.

Many challenges of 2017 defused over time: elections in France and in the Netherlands got off lightly; many announcements of the US president proved to be hot air – at least until now; BREXIT negotiations are difficult but the first shock has rapidly been overcome. Only the federal elections in Germany leave an unsatisfactory situation as the forming of a government is postponed to 2018.

The phase of a merely managing government is going to coin 2018. The question how long this phase will last and which government constellation will be signed – or if even new elections have to take place – is going to keep political Germany busy. However, tangible economic effects are not expected. Though, the current managing function of the government may not pay sufficient attention to important developments such as digitization of the economy, transformation of the automobile sector or the European integration, which is fostered by the French president Macron. BREXIT negotiations will be continued in 2018. Then talks will start about a free trade agreement, which will be crucial for many German companies.

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Hence, 2018 will be exciting in many aspects. GWS is adopting a positive perspective: like last year, GWS forecast of the German GDP growth rate ranges between 1.75% and 2.00%. Compared with 2017, this implies a slight deceleration of economic growth. Still, Germany continues to follow a superior growth path. This is induced by a continuous positive assessment of domestic demand - albeit its growth impact is expected to decrease slightly. Amongst other factors, the upper bound is defined by the positive position of state net lending/net borrowing. Very dynamic incoming orders for investment and intermediate goods indicate an acceleration of investment activities. Besides, world trade development and especially the very good performance of European countries will have a positive impact on German export activities – although slightly slowed down by an also increasing import demand.

2018 will be coined by topics such as demographic change, digitization and world trade in different forms and shapes. These topics will continue to be areas of GWS research studies, publications and presentations.

Other figures can be found here.