German economy is currently operating at modest speed
The German economy is currently operating at modest speed but business sentiment still remains strong, the Deutsche Bundesbank, the central bank, said in its March monthly report released Monday. "Being in a fundamentally good condition, the German economy is currently visibly lacking momentum," the central bank said. The bank also said that Germany will face perceptible demographic challenges over the next few years. The domestic labour force will shrink and age. The report examines the potential impact this will have on the German economy’s potential growth. The report shows that the dampening effects of demographics can be mitigated if suitable reform steps are taken by the end of this decade, thereby essentially allowing the current growth in potential output of around 1¼% per year until 2020 to be maintained.
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