Germany: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany
IMF Staff Country Reports, July 18, 2024
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- Germany: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany
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- Published: July 18, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400283260.002
Macroeconomic outlook and growth
- The German economy has begun to recover from the energy-price shock.
- Gradual economic recovery is expected to continue this year.
- With wage growth now exceeding inflation, private consumption is expected to drive recovery during 2024.
- Risks to growth are broadly balanced, with both positive and negative surprises to consumer and investor sentiment possible.
Inflation and prices
- Inflation is expected to slowly fall to around 2 percent as lower wholesale energy prices continue to pass through supply chains and to end-users.
Financial sector and banking vulnerabilities
- High interest rates have boosted bank profitability, but part of this increase is likely temporary.
- High interest rates have exposed vulnerabilities in banks’ financing of commercial real estate activity.
Fiscal policy and public investment
- Fiscal policy is tight, putting the debt-to-gross domestic product ratio on a downward path.
- Public investment is relatively low.
Labor market and labor supply recommendations
- To stabilize labor supply, the authorities should make it easier for women to work full time.
- Recommended measures include:
- Expanding access to reliable child- and eldercare services.
- Exploring ways to reduce the effective marginal tax rate on second earners in married couples.
Germany: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Germany
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