Although foreign trade is currently being hampered by dampening global dynamics, it is simultaneously being buoyed by the euro’s depreciation and the strengthening cyclical recovery in the euro area. The Bundesbank’s economists expect Germany’s real GDP to grow by 1.7% this year, 1.8% in 2016 and 1.5% in 2017.
A puzzling feature of the German economy is the divergence of business investment and employment, all the more so given that financing conditions are extraordinarily favourable. The weak level of business investment might be explained by the high degree of uncertainty over external developments, but it might also point to an anticipated future shortage of skilled labour. In other words: ageing tones down investment.