14/02/2012 - The German economy recovered rapidly from the 2008-09 recession, with GDP topping pre-crisis rates during 2011 and unemployment falling significantly. According to the OECD’s latest Economic Survey of Germany presented today in Berlin by OECD Secretary-General Angel Gurría, Germany has an impressive economic track record, but now faces a cyclical return to slower growth rates and challenges to lay the foundations for long-term growth.
The report cites numerous downside risks posed by the global slowdown, the deterioration of world trade and the euro area debt crisis. Given the weight and importance of Germany’s economy for Europe, growth-enhancing structural reforms can make an important contribution to stronger and more balanced growth perspectives not only in Germany but also in the Euro area.
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In a long-term perspective, Germany needs to transform its growth model to thrive as a knowledge-based economy. This transition requires policy efforts, investment and reforms in education, skills and innovation and continued leadership in green growth. But it also needs to work towards less burdensome regulations of services, increased labour participation of women and older workers and, thus, strengthening domestic demand. Germany should also compare itself with other economies in the emerging world, and be ready to compete with countries that have been growing at higher rates for quite some time now. |
“Germany’s recent economic performance has been exceptional, with low unemployment and solid growth. Many other countries are looking at the German mix of labour market reforms, social partners’ constructive flexibility and sound fiscal policy,” Mr. Gurría said. “But moving ahead towards a knowledge based economy will require further policy reform. With the population ageing rapidly, more needs to be done to raise the medium- and long-term growth potential, notably through reforms that boost domestic demand, increase productivity growth and expand the labour force.” ( read the full speech )
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