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In a recent press conference, the Federal Statistical Office presented the German gross domestic product and the fiscal balance of the state in 2018.
The German economy grew by 1.5 percent in 2018. For the ninth year in succession, the gross domestic product (GDP) has thus achieved positive growth compared with the previous year.
The growth came primarily from the domestic market. Both private consumer spending (+1.0 percent) and government spending (+1.1 percent) were higher than in 2017. With a growth contribution of 0.7 percentage points, consumption contributed almost half to GDP growth.
Prices in Germany increased in 2018
Albert Braakmann, Director at the Federal Statistical Office: “Prices in Germany increased on average in 2018. For consumers, they have probably increased by a total of 1.9 percent. Measured by the consumer price index, the inflation rate was thus in line with the European monetary policy target of just under 2 percent.
The energy price increases in the second half of the year were largely responsible for the rise in prices. Petroleum products in particular became significantly more expensive. Excluding energy prices, the inflation rate would have been 1.6 percent. The relatively sharp year-on-year increase in producer prices for industrial products, wholesale prices and import prices in the second half of 2018 was also influenced by the development of energy prices. In addition, prices for new construction continued to rise in 2018.”
Gross domestic product slightly slowed by increasing imports
Price-adjusted gross investments increased by 4.8 percent year-on-year. Particular investments were made in equipment (+4.5 percent), construction (+3.0 percent), in particular public civil engineering, research and development (+0.4 percent).
German GDP growth slowed slightly (-0.2 percentage points) due to the stronger increase in imports. Braakmann sums up: “In an increasingly difficult environment for the global economy, including trade disputes, sanctions and punitive tariffs as well as the uncertainties surrounding the Brexit negotiations, the German economy was able to further expand its trade with foreign countries. German exports continued to grow on average in 2018, but not as strongly as in previous years: Price-adjusted exports of goods and services were 2.4 percent higher than in 2017. Imports grew more strongly in the same period, by +3.4 percent. The nominal trade balance has decreased by about 14 billion euros compared to 2017.”
Rising gross value added
Gross value added has increased in almost all sectors of the economy. Above-average growth was recorded in information and communications (+3.7 percent), construction (+3.6 percent) and trade, transport and hospitality (+2.1 percent). By contrast, the manufacturing sector (excluding construction) grew at a below-average rate of 1.0 percent.
Employment at record level
The number of people in employment reached a new high. The increase of 1.3 per cent is mainly due to the increase in the number of employees subject to social insurance contributions. Higher labour force participation and the immigration of workers from abroad offset age-related demographic effects.
Braakmann: “The number of unemployed persons as defined by the International Labour Organization (ILO) fell by 130,000 in 2018 to just under 1.5 million. According to initial estimates based on the Labour Force Survey, 8.0 per cent fewer people were unemployed in Germany than in 2017. The share of the unemployed in the total labour force averaged 3.2 percent in 2018. The unemployment rate has thus fallen by more than two thirds since its peak of 10.3 percent in 2005 and was lower in 2018 than ever before in a united Germany.”
Germany achieves record surplus
“In 2018, the state achieved a record surplus of 59.2 billion euros (2017: 34.0 billion euros). According to preliminary calculations, the federal, state, municipal and social insurance funds ended the year with a surplus for the fifth time in succession. Based on the gross domestic product at current prices, the surplus ratio for the state in 2018 is 1.7 percent,” the Federal Statistical Office reports.
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Link: Press conference “Gross Domestic Product 2018 for Germany” by the Federal Statistical Office
Image: ake1150sb / iStock