{
  "title": "Germany: 2022 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Germany",
  "publication": "IMF Staff Country Reports, July 20, 2022",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2022/07/19/germany-2022-article-iv-consultation-press-release-staff-report-and-statement-by-the-521018",
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  "summary": "This 2022 Article IV Consultation with Germany discusses that before Russia’s invasion of Ukraine, economic activity in Germany was firming up. Uncertainty is very high, with risks to the baseline growth forecast skewed downward and risks to the inflation forecast skewed upward.",
  "sections": [
    {
      "heading": "Macroeconomic outlook and risks",
      "content": "- Before Russia’s invasion of Ukraine, economic activity in Germany was firming up.\n- Uncertainty is very high.\n- Risks to the baseline growth forecast are skewed downward.\n- Risks to the inflation forecast are skewed upward.\n- The greatest threat identified is a persistent shut-off of the remaining Russian gas exports to Europe, which could cause sizable reductions in German economic activity and increases in inflation.\n- Persistently-high inflation and fears of a de-anchoring of inflation expectations can prompt major central banks to tighten policies faster than currently expected, potentially triggering:\n  - a sharp tightening in financial conditions, and\n  - corrections in asset prices."
    },
    {
      "heading": "Government policy response to energy shock",
      "content": "- In response to surging energy prices, the government is:\n  - expanding income support for vulnerable households,\n  - cutting fuel taxes, and\n  - providing liquidity support to firms."
    },
    {
      "heading": "Financial sector assessment and recommendations",
      "content": "- The 2022 Financial Sector Assessment Program (FSAP) assesses the German banking sector as generally resilient to shocks.\n- The FSAP points to pockets of vulnerability and downside risks that require close monitoring.\n- The FSAP calls for some additional buffers for less capitalized banks."
    },
    {
      "heading": "Housing market and macroprudential policy",
      "content": "- Given continued rapid house price gains:\n  - recently activated capital-based measures should be supplemented with borrower-based measures, such as supervisory guidance on a loan-to-value cap."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Financial institutions; International organization; Monetary policy; National accounts; Prices\n- Keywords: assessment methodology; Commercial banks; Cooperative banks; Energy prices; Europe; gas market; Global; headline consumer price inflation; Income; Inflation; inflation pressure; money market rate; staff report projection\n\n---\n\n Content in this bundle\n\n- 1deuea2022001\n  - 1deuea2022001 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1deuea2022001 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: July 20, 2022",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400216497.002",
    "Before Russia’s invasion of Ukraine, economic activity in Germany was firming up.",
    "Uncertainty is very high.",
    "Risks to the baseline growth forecast are skewed downward.",
    "Risks to the inflation forecast are skewed upward.",
    "The greatest threat identified is a persistent shut-off of the remaining Russian gas exports to Europe, which could cause sizable reductions in German economic activity and increases in inflation.",
    "Persistently-high inflation and fears of a de-anchoring of inflation expectations can prompt major central banks to tighten policies faster than currently expected, potentially triggering:",
    "In response to surging energy prices, the government is:",
    "The 2022 Financial Sector Assessment Program (FSAP) assesses the German banking sector as generally resilient to shocks.",
    "The FSAP points to pockets of vulnerability and downside risks that require close monitoring.",
    "The FSAP calls for some additional buffers for less capitalized banks.",
    "Given continued rapid house price gains:",
    "Subject: Financial institutions; International organization; Monetary policy; National accounts; Prices",
    "Keywords: assessment methodology; Commercial banks; Cooperative banks; Energy prices; Europe; gas market; Global; headline consumer price inflation; Income; Inflation; inflation pressure; money market rate; staff report projection",
    "**1deuea2022001**"
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