The German Federal Statistical Office will present its preliminary economic report for 2015 on Thursday. With a growth rate of 1.7 percent, the German economy has seen its strongest growth since 2011. In addition, the government has achieved an increase in revenues amounting to 0.75 percent of the gross domestic product (GDP). Arithmetically, the tax authorities could have managed without the solidarity supplement and the inheritance tax without endangering the balanced budget. And, as we know, employment was higher and unemployment lower than they have been since German reunification. From a macroeconomic perspective, we can apparently sit back and relax.
But the first impression is deceiving, because the traditional German business model is beginning to falter. The contribution of foreign trade to growth was likely modest in 2015, almost a disgrace for many who long prided themselves in Germany’s reputation as the “world export champion.”