.Germany’s Investment Gap
Since 2000 German gross fixed capital formation has
fallen well behind the rest of the Eurozone.
1 Trending
shows, the proportion of German GDP going to
investment fell from 21 percent in 2000 to 17 percent
in 2013 and even after the euro crisis remains below
the average for the rest of the Eurozone (without
Germany) (see box on »National Accounts Revisions and
Investment Data«).
2 On this basis, the German Institute
for Economic Research (DIW) identifies a cumulative
investment deficit of approximately 40 percent of GDP or
one trillion euros (Bach et al. 2013). Priewe and Rietzler
(2010) and Sinn (2005) had already noted a weakness of
investment in Germany. DIW sees Germany’s long-term
growth threatened by this gap, arguing that the missing
investments are holding back growth in productivity.
EU Forecast
euf:ba18a:99/nws-01