“The German economy is overcoming the coronavirus crisis and is poised for the start of a strong upswing,” writes the Bundesbank in its semi-annual projection. The Bundesbank’s economists expect that gross domestic product will reattain its pre-crisis level as early as this summer. It is likely that the rate of inflation will rise strongly to 2.6% in 2021.

Im Mai zog die Inflation erneut kräftig an, was vor allem auf – auch wegen der Auswirkungen des Krieges – stark steigende Energie- und Nahrungsmittelpreise zurückzuführen ist. Der Inflationsdruck hat jedoch an Breite und Intensität gewonnen, was sich in erheblichen Preissteigerungen bei zahlreichen Waren und Dienstleistungen zeigt. Fachleute des Eurosystems haben ihre Basisprojektionen zur Inflationsentwicklung deutlich nach oben korrigiert.

A new weekly activity index (WAI) for the German economy has been developed at the Bundesbank to assess the impact of the COVID-19 crisis on the economy from a near-time perspective. The Bundesbank is using this new indicator as an input in its short-term economic analysis.

Germany’s current account recorded a surplus of €16.5 billion in August 2020, down €4.6 billion from the previous month’s level.

According to Bundesbank President Jens Weidmann central banks could do more to curb global warming. In an op-ed for the “Financial Times” he pointed out a number of possible courses of action. However, he added, central banks should stay focused on their primary objective, price stability. “When it comes to saving the planet, central banks do not have a magic wand”, he wrote.

Outlook for the German economy – macroeconomic projections for 2015 and 2016