Annual Economic Report
|Economic growth in terms of Gross Domestic Product (GDP) is expected to slow down to 0.7% this year from 3.0% in 2011, according to the Federal Government's 2012 Annual Economic Report. Despite the deceleration, Germany is doing much better than most of the other European countries which suffer from rising unemployment, spiraling budget deficits and declining GDP.|
"Germany continues to be an anchor of stability and growth in Europe. Following two years of unusually high growth, the Germany economy remains encouragingly robust. We are expecting the more challenging external economic environment to result in a temporary slow-down in growth in the winter half-year. But we are firmly convinced that the German economy will return to a faster pace of growth in the course of the year. This will be generated by the highly positive combination of increasing employment, rising incomes and stable prices. The Federal Government's economic policy will strengthen and perpetuate our growth”, said Philipp Rösler (photo), Federal Minister of Economics and Technology.
The report’s main projections are:
• The success story on the labor market will continue. The number of gainfully active people will grow by 220,000 this year to a total of 41.3 million. The unemployment rate will drop to 6.8%. Unemployment will thus be at its lowest level for 20 years.
• Household disposable income will increase by 3.0%. At the same time, inflation will be moderate at 1.8%. The bottom line will see a clear rise in purchasing power.
• The stimulus for growth in 2012 will derive exclusively from the domestic economy. Consumer spending in particular will give a significant boost to the German economy. This will strengthen the German economy's resilience to external influences.