According to our June 2016 economic forecast, the German economy is predicted to expand by 1.7 % this year, by 1.4 % next year and by 1.6 % in 2018. Adjusting for the number of working days makes the growth rates even more uniform, and they are higher than the estimated increase in potential output, which is running at about 1.4 % per year.
The utilisation rate is therefore continuing to rise, and it is expected to be significantly up on the long-term average at the end of the projection horizon. However, unlike the short to medium-term economic outlook, the longer-term growth expectations for the German economy are not only rosy.