Future overall economic development


There are currently no indications that the solid worldwide recovery might be coming to an end. FERI Investment Research is also expecting the healthy economic activity in the eurozone to continue and is forecasting growth of 1.9% for 2018. This performance is being spurred on by the good global economic situation and the increase in exports resulting from this, the positive effects of low interest rates on bank lending and a relaxation of fiscal consolidation policies in many European countries. These forces will essentially remain intact for the time being. Added to this is the fact that the internal base for the upswing has stabilised in several countries, primarily due to falling unemployment figures and the impetus this provides for private consumption.


Germany remains on course for growth

In Germany domestic demand will remain the most important driving force of the economic upswing in 2018. In its 2018 Financial Report, the German government states a good performance of the labour market and solid income gains as key factors for the dynamics in the domestic economy.


FERI Investment Research anticipates the upswing to continue for Germany, although with slightly reduced dynamism. In absolute terms, our economic experts are anticipating economic growth of 1.8% for 2018.


Labour market prospects remain favourable

Based on estimates of the Institute for Employment Research of the German Federal Employment Agency (IAB), labour market developments in Germany remain positive. In 2018 the average number of jobseekers is set to decline by a further 80,000 to 2.48 million. A temporary increase in the unemployment figures due to refugee registrations is being compensated by the generally good development, however, this effect is slowing down the rate of decline of unemployment figures compared to 2017. The upward trend in gainful employment is also set to continue. The labour market experts at the IAB predicted an increase in total employment figures of around 550,000 persons in 2018.


The labour market is also likely to remain dynamic in the long term, especially for specialists. Indeed, a survey undertaken by Basel-based research institute Prognos suggests that the shortfall in terms of specialists, engineers, researchers and healthcare professionals could reach 3 million persons by 2030 and 3.3 million by 2040.


Increasing salaries and wages to be anticipated.

The framework conditions for private households remain favourable. The German government is forecasting a 3.9% increase in gross salaries and wages in 2018 and according to a forecast provided by the German government, the price-adjusted consumption expenditure of private households will increase by 1.6% in 2018. According to estimates of the German government, investment activity should gain momentum in 2018. Private residential construction is in particular continuing to display lively development. The high degree of job security and above-average increases in real wages are serving to promote demand, as are the low interest rates. For 2018, Deutsche Bundesbank is expecting a savings ratio at the previous year’s level of 9.6%.