On 15 May 2017, the International Monetary Fund (IMF) presented the results of its annual Article IV consultation with Germany.
The IMF’s projections for economic growth in Germany largely correspond to national forecasts. The IMF confirmed that Germany’s economy and public budgets are in good shape and highlighted its prudent economic policies, the structural reforms already carried out, and the well-functioning social security network.
The German government had constructive talks with the IMF in which it reaffirmed that it would continue to pursue sound fiscal policies. Structural reforms and fiscal consolidation play a decisive role in spurring economic growth and further enhancing the climate for private investment. Germany’s prudent fiscal policies have helped to reduce debt levels even further. At the same time, public investment has increased significantly, particularly in the area of research. In the context of public investment, the German government drew the IMF’s attention to future fiscal challenges, especially in connection with demographic trends.
Federal Finance Minister Wolfgang Schäuble reiterated that there will be scope for easing the burden on lower and middle income earners in the next legislative term. In his view, the IMF’s conclusions on taxes confirm that Germany is taking the right approach.
The IMF’s overall assessment of German fiscal policy is positive.
Like the IMF, the German government believes that the current account balance is affected by factors on which German policy-makers have no influence, such as commodity prices and exchange rates.