Germany: The following represents a general Table of Contents outline for the Country Economic Forecast. The actual report may cover any or all of the topics listed below. Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following: Domestic demand Private consumption Fixed investment Stockbuilding (% of GDP) Government consumption Exports of goods and services Imports of goods and services Unemployment Consumer prices Current account balance (US$ and % of GDP) Government budget (% of GDP) Short-term interest rates (%) Long-term interest rates (%) Exchange rate (vs. US dollar) Exchange rate (vs. euro) Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts Charts and Tables - covering a full range of economic developments relevant to the time period covered. These could include such topics as: Contributions to GDP growth Monthly industrial output Business and consumer confidence Unemployment rate Retail sales Prices and earnings Consumption and investment Government balance and debt GDP and industrial production Monetary policy and bond yields Background Information on the country One or two pages of text covering the main historical political and economic factors that determine the country's current position Key Facts on the country Map of the country Key political facts Long-term economic and social development - changes since 1980 Structure of GDP by output - latest year Long-term sovereign credit ratings and outlook Corruption perceptions index- latest year Structural economic indicators - changes since 1990 Destination of goods' exports -prior years - latest year Composition of goods & services exports - latest year
We had factored in a significant rebound in German growth in 2013Q2 and recent data support this view. Industrial output rose 1.2% in April after a strong gain in March and the PMIs and Ifo survey were up in May. These results confirm our view that the very weak growth in early 2013 reflected a temporary slowdown rather than a more protracted downturn. We still expect GDP growth to pick up from 0.3% this year to 1.6% in 2014. In particular, business investment should continue to increase after sharp falls in 2012. German companies are enjoying credit conditions at their most favourable for years. If emerging markets and global trade strengthen, this should encourage firms to raise their levels of investment. Construction was a drag on growth at the beginning of the year, probably related to weather conditions. But that should prove short-lived. In April, construction activity increased sharply. With house prices rising at a robust pace (5.6% year-on-year in April) and financing available at very low rates, construction output should contribute to growth from 2013Q2 onwards. An additional boost to growth could come from easing fiscal policy. But when Chancellor Merkel proposed to increase spending a few weeks ago, she was met with a barrage of negative responses. As a result, nothing specific or credible will be announced until after the September elections.