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Germany: 2018 Article IV Consultation – Press Release; Staff Report and Statement by the Executive Director for Germany
Author:
International Monetary Fund. European Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2018: Issue 208
Language:
English
Publication Date:
04 Jul 2018
DOI:
https://doi.org/10.5089/9781484366158.002
ISBN:
9781484366158
ISSN:
1934-7685
Pages:
106
Keywords:
ISCR; CR; surplus; core inflation; IMF staff calculation; government; interest rate; staff; labor market participation; interest rate environment; housing sector; current account; Commercial banks; Cooperative banks; Public investment and public-private partnerships (PPP); Productivity; Global; Europe
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The Germany economy has performed very well in recent years, supported by prudent economic management and past structural reforms. Growth is robust, employment is rising, and the unemployment rate has fallen to levels not seen in decades. Inflation remains low but wage growth is picking up, reflecting the strength of the labor market. Looking beyond these positive cyclical developments, unfavorable demographics will soon weigh on potential growth and put pressure on public finances. Having already accumulated sizable buffers through savings, Germany should now prioritize domestic investment in physical and human capital to prepare for the future. The new government's coalition agreement contains several welcome measures in this direction, but more forceful actions to boost labor supply and increase labor productivity would help stimulate domestic investment and reduce Germany’s large current account surplus.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund