Economic Development

In 2016, the German economy grew by 1.9 % in real terms compared to the previous year (previous year: 1.7%). For the fourth quarter, the German Institute for Economic Research (DIW) anticipates an increase of 0.5 % compared to the previous quarter (Fig. 48). Positive effects were provided in particular by private consumption, which posted strong growth of 2.0 % in 2016. In this context, the German Federal Statistical Office estimates that retail revenues grew by 1.6 % in real terms. This accounts for around a quarter of private consumption. In addition, government spending also provided significant growth momentum, partly due to higher expenses as a result of refugee migration. Increased investment in construction also boosted the economy. By contrast, foreign trade did not develop with as much momentum as hoped: Although exports increased, particularly to other European countries, their contribution to growth was low due to higher imports.

In the eurozone, the International Monetary Fund (IMF) anticipates an increase of 1.7 % in real terms for 2016 as a whole (previous year: 2.0 %). According to estimates by the ifo Institute, economic output is likely to have grown by 0.4 % in the fourth quarter as compared to the previous quarter. In addition to government spending, private consumer spending provided the strongest growth momentum.

After a relatively weak first half of the year, the outlook for the global economy brightened somewhat in the second half of 2016. This was partly attributable to the economic recovery in Russia and Brazil, as well as the significant upturn in the US economy. At the same time, institutes see considerable forecast risks, especially in the geopolitical environment. For 2016, the IMF anticipates real growth of 3.1 % (previous year: 3.2 %).

Development of gross domestic product in Germany (Fig. 48)