This year, the German economy is obtaining major support from the still upbeat labour market situation, very favourable financing conditions and increasing government expenditure. The relaxation of the fiscal stance will probably reach a magnitude of ¾% of GDP this year, so it could add ½ of a percentage point to growth.
Economic activity in the euro area followed much the same trajectory as in Germany, but it was not quite as weak as it was here. Euro area GDP increased by 1.2% in 2019. For this year, the European Commission, for example, has expected activity to grow at a similarly moderate pace. These forecasts, too, are undoubtedly associated with heightened uncertainty.