Strong economic growth in the first half of 2017

Real gross domestic product (GDP) showed strong growth in both the first (+0.7%) and the second quarter (+0.6%) after adjustments to reflect seasonal and calendar effects. In annualized terms, this equates to economic growth of 2.7% in the first half of 2017. As the German Federal Statistical Office has now also made an upward adjustment to the year-on-year change in calendar-adjusted GDP in the first quarter of 2017 (reporting a figure of 2.0% as opposed to the 1.7% reported previously), real GDP growth is expected to come to an average of around 2% in 2017 (previous forecast 1.7%). We expect the economic conditions to remain positive in the second half of the year, although the pace of growth is unlikely to be quite as high as it was in the first six months.

The fact that all components of domestic demand – private and government consumption, construction and machinery and equipment investment – contributed to growth in the second quarter comes as a positive development that bears testimony to the broad-based nature of the upswing. In particular, this fuels hopes of an ongoing upward trend in investment activity, which remains subdued.

In arithmetic terms, the external contribution put a damper on growth. This can, however, be traced back to a significant increase in real imports, which is due, in turn, to the strong domestic economy. Real exports also expanded in the second quarter, but at a slower rate than imports. Given that the global economy is in good shape, we expect to see exports provide further economic impetus as the year progresses despite the appreciation of the euro. Real exports are tipped to increase by around 4% on average in 2017.


Rolf Schneider

Allianz SE
Phone: +49 69 24431 5790

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