OECD Economic Surveys: Germany

Every 18 months
1999-0251 (online)
1995-3194 (print)
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OECD’s periodic surveys of the German economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Germany 2012

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14 Feb 2012
9789264168701 (PDF) ;9789264127067(print)

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OECD's 2012 Economic Survey of Germany examines recent economic developments, policies and prospsects as well as a more detailed look at labour market reforms and climate change policies.

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  • Basic statistics of Germany, 2010
  • Executive summary
    Following a rapid recovery from the 2008-09 recession, growth has slowed in the second half of 2011 and the economy is facing a soft patch with significant downside risks to activity. On the domestic front, a return to lower growth rates from the strong prior upswing was to be expected from a cyclical perspective as potential growth remains weak. This downswing is exacerbated by the substantial deterioration of world trade growth and a loss of confidence due to the euro area debt crisis.
  • Assessment and recommendations
    Following a rapid and forceful recovery from the deep recession – pre-crisis real GDP was reached again in the second quarter of 2011 – growth has slowed and the outlook has weakened considerably. First, this reflects a moderation of growth rates from their cyclical highs towards their lower potential rates, indicating that the prior upswing was mainly a cyclical one. Second, this slowing is reinforced by a generalised slowing of the world economy, unusually high uncertainty and business confidence that is declining from high levels.
  • The German labour market
    The strength of the German labour market response to the financial crisis of 2008-09 demonstrated the benefits of past labour market reforms, which raised work incentives, improved job matching and increased working hour flexibility. Going forward, the government should build on this success and address the remaining challenges which include raising the labour participation of females and older workers (which among other things will necessitate adjustments to the tax and education system) and fostering migration, notably of skilled workers. The significant ageing-related decline in the labour force exemplifies the urgency of further structural reforms in this area.
  • Climate change policies
    Germany reduced greenhouse gas emissions substantially but remains an important emitter. Ambitious targets for climate change mitigation have been fixed and a broad range of environmental measures are being implemented. The efficiency of these measures, as well as their coordination, should be improved though, as reaching the targets risks being costly. In particular, the early phase-out of nuclear power and the development of renewable energy sources will require high levels of investment and public financial support. Establishing a clear carbon price in all sectors of the economy and phasing out environmentally harmful subsidies would contribute to reducing the CO2 abatement cost. The generosity of feed-in tariffs also needs to be carefully monitored and adjusted tightly in line with market developments to avoid deadweight losses and excessive increases in electricity prices. In addition, in order to maintain the German leadership in green sectors and preserve future sources of growth, competition in the energy sectors should be increased and eco-innovation further developed.
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