Germany in 2017: Resilient consumption
Germany in 2017: Resilient consumption, recovery in investment
We considerably underestimated German GDP growth in 2017 for two reasons.
First, contrary to our expectations, employment growth accelerated again during
2016 so that the forecast slowdown in consumption growth did not take place.
Second, investment activity was considerably stronger than expected at the
beginning of 2017.
Despite major uncertainties about economic policy,
investment in machinery and equipment rose significantly during the first half of
the year. Construction investment also surprised to the upside in Q1, helped
along by the favourable weather conditions. As a result, capital expenditure
seems to have increased by almost 4% in 2017 as a whole (forecast at the
beginning of the year: 1%).
EU Forecast
euf:ba18h:94/nws-01