Economic climate in Germany - statistics & facts

Economic climate refers to the state of the economy, be it on a regional or national level. The climate influences the development of such key areas as employment, the job market, financial investment decisions, how businesses structure their work and workforce. It also reaches further down to consumer decisions, spending, and attitudes. Germany continues to be the largest economy in Europe, known for its internationally successful industries. The German economic climate has been affected by factors such as the recent inflation and the Russia-Ukraine war, to name a few.

Consumer confidence

Experts observing and evaluating the German economy may separate indicators into three groups. One is comprised of so-called early indicators (Frühindikatoren). These include economic barometers from various sources, as well as business climate balance assessments and the consumer confidence index (CCI). The latter measures financial expectations of consumers based on their answers to a survey. The underlying basis for the CCI is the assumption that optimistic consumers will spend more, while the opposite is true for respondents with a pessimistic outlook on their financial circumstances. If the economic climate influences consumer confidence, in turn, consumer confidence and subsequent purchasing power influence economic development. With the exception of the outbreak of the coronavirus (COVID-19) pandemic in 2020, CCI figures in Germany remained comparatively stable throughout the past decade. Since summer 2021, however, consumer confidence has been decreasing. It took a large hit in September 2022 due to the energy crisis and high prices caused by inflation, but it has been steadily rising since.

GDP and inflation levels

Other economic indicators are present (Präsenzindikatoren) and late (Spätindikatoren) indicators. Present indicators include the gross domestic product (GDP), import and export volume in the country, as well as the change in producer prices. Germany's GDP took a dip of almost 4.6 percent in 2020 when the COVID-19 pandemic began and is predicted to shrink again in 2023. This is due to several factors including the weakening economic situation of Germany’s main trading partners which has resulted in a decrease in exports. Another sign of the state of the economy is so-called late indicators which include unemployment levels as well as inflation and tax revenue. When looking at the annual unemployment rate from 2005 to 2022, figures were decreasing steadily until 2020. But since then, they have decreased. In 2022, Germany saw a very sharp increase in inflation levels which have continued to be high in 2023. They are however forecast to decrease over the next few years, suggesting an economic recovery.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, Dec 21, 2023

Key insights

Business climate balance value for the German economy (ifo)
-10 points
Y-o-y change in disposable income in private households in Germany
6.1% growth
Inflation rate forecast for 2024 in Germany
2.6%
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Editor’s Picks Current statistics on this topic

ifo Business Climate balance value for the economy in Germany from January 2023 to January 2024

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ifo Business Climate balance for the economy in Germany 2023-2024

Business climate development for medium-sized companies in Germany from December 2021 to December 2023

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Business climate for medium-sized companies in Germany 2021-2023

Change in household and government consumption expenditure in Germany from 2nd quarter 2019 to 2nd quarter 2023

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Quarterly private and government consumption expenditure change in Germany 2019-2023

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