Quarterly Report Germany II/2016
The German economy started the year with a bound. In the first quarter of 2016 GDP rose 0.7 percent from the previous quarter after calendar and seasonal adjustments. This was 1.3 percent more than the figure for the same quarter last year.
Economic developments are primarily determined by domestic factors. Private consumption, bolstered by unbridled employment growth, better pay and low inflation, remains a main driving force behind these developments. The public sector, which is responsible for a good quarter of all consumer spending, should generate plenty of demand.
We are expecting a moderate upturn in investment activity this year. Developments in construction investments were primarily positive. Given the murky prospects for foreign trade, however, investments in equipment are likely to experience only modest growth. Net exports will probably make a negative contribution to growth.