In 2018, the German economy is estimated to have grown by 1.5% in real terms compared to the previous year (previous year: 2.2%). After gross domestic product (GDP) declined in the third quarter due to fluctuations in the automotive sector and a general slowdown in the global economy, the Institute for Economic Research (ifo) is expecting a slight economic growth again in the fourth quarter, albeit with somewhat less momentum than in previous years.
056 / Development of Gross Domestic Product in Germany in %, change vs. previous quarter
Adjusted for price, seasonal and calendar effects.
Source: Destatis, ifo economic forecast from winter 2018, December 20, 2018 / e: estimate.
The economic growth has been mainly driven by the domestic economy and by private consumption, which was benefiting from a strong increase in employment and substantial wage increases. According to Federal Statistical Office retail revenues grew between 1.4 and 1.5% in real terms in 2018; they account for around a third of private consumption. The online and mail order business developed particularly dynamically (January to November +5.9% in real terms). In addition, the German economy was supported by construction as well as equipment investments and government spending.