Economic growth has been stable in recent years with domestic demand, notably private consumption, as the main growth driver. Real GDP growth stood at 1.6 % in 2014 and 1.7 % in 2015, according to first official results. The growth pattern has evolved with domestic demand having become a key growth driver. Notably, private consumption has strengthened, supported by the strong performance of the labour market and temporary factors such as low energy prices. The labour market weathered the crisis well and the unemployment rate has decreased to a post-reunification low.
Germany is experiencing macroeconomic imbalances. The large and persistent current account surplus has cross-border relevance and reflects excess savings and subdued investment in both the private and public sectors. Weak domestic investment hampers potential growth and strong reliance on external demand entails macroeconomic risks in a context of subdued foreign demand. While private consumption has strengthened somewhat, the weakness of investment appears entrenched. Public investment has fallen, despite the available fiscal space and favourable financing conditions, and steps taken to increase public investment are insufficient to meet the infrastructure investment gap. Further action is needed to facilitate conditions for private investment, including by reforming the services sector and improving the efficiency of the tax system.
Read a complete analysis of Germany's economy in the country report 2016 [3 MB]
2015 recommendations in brief
The Commission has made three country-specific recommendations to Germany to help it improve its economic performance. These are in the areas of: investment and taxation; pensions and labour market; services and rail.