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OECD Economic Surveys: Germany 2012
OECD Publishing, February 2012, Pages: 118
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. In the current situation, policymakers are faced with a multitude of challenges. As the economy goes through this soft patch, it is essential to let automatic stabilisers work fully as allowed by the fiscal rule. On the structural side, Germany has made major progress, notably on the labour market, which paid off handsomely in the recent recession. However, still more needs to be done to strengthen the growth potential, not least in view of rapid population ageing.
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.
Assessment and recommendations
-Growth is slowing after an extraordinary rebound from the recession
-Structural reforms for stronger and more sustainable growth
-Annex A1. Progress in structural reform
Chapter 1. The German labour market: preparing for the future
-Past labour market reforms paid off handsomely during the crisis
-Long-term challenges remain
-Annex 1.A1. Estimating Okun’s law for Germany
-Annex 1.A2. The impact of the sectoral composition of the recession on the unemployment response
-Annex 1.A3. The impact of labour shortages on labour market outcomes
Chapter 2. Climate change policies: make ambition pay
-Germany has committed itself to challenging reductions in greenhouse gas emissions
-Climate change policies need to become more cost-efficient
-Continuing the green growth success story
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