Germany: 2018 Article IV Consultation – Press Release; Staff Report and Statement by the Executive Director for Germany

International Monetary Fund

No 2018/208, IMF Staff Country Reports from International Monetary Fund

Abstract: 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.

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 (search for similar items in EconPapers)
Pages: 106
Date: 2018-07-04
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