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Moderate economic momentum

(완만한 성장세 속 경제 전망)

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Title page 1

Contents 1

SUMMARY 2

I. SUMMARY 3

II. GLOBAL ECONOMY 6

1. Global economy expands modestly 7

2. Decline in global inflation continues 20

3. Opportunities and risks 24

III. GERMANY 27

1. Real economy: industrial weakness persists despite expansionary fiscal policy 30

2. Inflation close to target 51

3. Stabilisation on the labour market 52

4. Expansionary fiscal policy from 2026 onwards 55

5. Potential output: Demographics dampen, capital formation provides only slight support 58

6. Opportunities and risks 62

APPENDIX 63

REFERENCES 71

Tables 19

TABLE 1. Gross domestic product and consumer prices of selected countries 19

TABLE 2. Forecast assumptions 25

TABLE 3. Comparison of the spring and the autumn forecasts for the year 2025 37

TABLE 4. Key economic indicators for Germany 50

TABLE 5. Labour market in Germany 54

TABLE 6. Discretionary fiscal policy measures 56

TABLE 7. Gross domestic product and consumer prices in the euro area 63

TABLE 8. Components of the forecast for GDP growth 63

TABLE 9. Contributions to growth of gross domestic product by expenditure components 64

TABLE 10. Key figures of the national accounts 65

TABLE 11. General government revenues and expenditures and selected fiscal indicators 69

Charts 3

CHART 1. Economic outlook for Germany and Europe 3

CHART 2. Determining factors for the forecast 4

CHART 3. Global growth and economic barometer 7

CHART 4. Global trade in goods and world industrial production 8

CHART 5. Exchange rates and export prices 9

CHART 6. Average effective tariff rate on US imports 12

CHART 7. Consumer price inflation in the USA and China 14

CHART 8. Gross domestic product and industrial production in the euro area 16

CHART 9. Real-time and leading indicators for GDP growth in the euro area 17

CHART 10. Energy and commodity prices 21

CHART 11. Monetary policy eased, financing conditions have hardly improved recently 23

CHART 12. Revision of gross domestic product data by the Federal Statistical Office 28

CHART 13. Characteristic development of GDP and its components during recession periods 29

CHART 14. Production is weak across the entire manufacturing sector in Germany 31

CHART 15. Economic indicators for manufacturing 33

CHART 16. Gross value added (GVA) in the service sector and the manufacturing sector 34

CHART 17. Expected economic development of the German economy 35

CHART 18. Consumption indicators in Germany 38

CHART 19. Determinants of private consumption 40

CHART 20. Indicators for the construction sector 43

CHART 21. Econometric model forecasts of government investment in construction 45

CHART 22. Investment indicators for Germany 46

CHART 23. Foreign trade indicators 48

CHART 24. Expected development of the external environment 49

CHART 25. Inflation in Germany 51

CHART 26. Development of the labour market 53

CHART 27. Development of public finances 57

CHART 28. Growth contributions of components to potential output and labour volume 58

CHART 29. Updated assumptions on the population development 59

CHART 30. Productivity Indicators 60

CHART 31. Productivity indicators: selected determinants of productivity growth 61

CHART 32. Components of German GDP 67

CHART 33. Forecast intervals for gross domestic product and consumer price growth in the euro area 68

CHART 34. Forecast intervals for gross domestic product and consumer price growth in Germany 68

CHART 35. Characteristic development of monthly indicators during recession periods 70

Boxes 13

BOX 1. Focus: The major economies of the US and China 13

BOX 2. Focus: Economic development in France, Italy, Spain and the Netherlands 15

BOX 3. Forecast assumptions 25

BOX 4. Background: Revision of the national accounts 28

BOX 5. Background: Dating the business cycle peak before the energy crisis in Germany worsened 29

BOX 6. Background: Revision of the GDP forecast for 2025 36

BOX 7. SVR analysis: Development of private consumption since 2024 40

BOX 8. SVR analysis: Model-based forecast of real government gross fixed capital formation in construction and price trends in public construction 44

BOX 9. Focus: Productivity development in Germany 60

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