1. Home
  2. Studies
  3. The German Economy in Times of Cheap Oil and Cheap Money
IW Research Group Economic Cycle IW-Trends No. 2 27. April 2015 The German Economy in Times of Cheap Oil and Cheap Money
Download PDF
The German Economy in Times of Cheap Oil and Cheap Money
IW Research Group Economic Cycle IW-Trends No. 2 27. April 2015

The German Economy in Times of Cheap Oil and Cheap Money

IW-Trends

Download PDF

Share this article:

or copy the following link:

The link was added to your clipboard!

German Economic Institute (IW) German Economic Institute (IW)

The German economy began the year 2015 with considerable momentum on the consumption side. A number of factors are currently raising consumer sentiment and private consumption: falling energy prices, extremely low interest rates, the good situation on the labour market as well as oneoff income increases due the introduction of the legal minimum wage and due to public pension policy. Next year, however, many of these mostly singular effects will have worn off, leaving buoyancy in spending on private consumption to ease again significantly. Against this background, real economic growth of almost 2 ¼ per cent is forecast for the year 2015. For 2016, a considerably lower increase in real GDP of just over 1 ½ per cent is to be expected. Despite a steep fall in the euro, foreign trade and business investment will only partly make up for the weaker growth in private consumption in 2016. The resulting growth decline in 2016 will leave Germany stuck with the sawtooth-shaped growth path of recent years. The good economic prospects for 2015 are largely due to the numerous special factors and by no means a corroboration of the economic policy of the German government. On the contrary, the good economic situation is papering over existing economic policy problems and higher cost burdens. These strains will only make themselves more apparent in the next recession. Thus, economic policy should change course already today in order to foster investment and growth on a more durable basis.

Download PDF
The German Economy in Times of Cheap Oil and Cheap Money
IW Research Group Economic Cycle IW-Trends No. 2 27. April 2015

IW-Forschungsgruppe Konjunktur: Deutsche Konjunktur im Zeichen billigen Öls und billigen Geldes

IW-Trends

Download PDF

German Economic Institute (IW) German Economic Institute (IW)

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
The Productivity Effects of Capital Formation in Germany
Michael Grömling IW-Trends No. 2 9. May 2022

The Productivity Effects of Capital Formation in Germany

Despite broad-based digitalisation, productivity advances in Germany in recent years have been considerably lower than in previous decades. This paper conducts a growth accounting which points to steeply declining stimuli from technical progress and especially ...

IW

Read the article
Jürgen Matthes IW-Policy Paper No. 1 25. February 2022

Stability instead of government overreach

Contrary to what the German government seems to be aiming for, a reform of the Stability and Growth Pact (SGP) is necessary. The debt reduction rule forces highly indebted euro countries to reduce their debt too quickly and too damagingly for growth.

IW

More about this topic

Content element with id 8880 Content element with id 9713