OECD Economic Survey of Germany 2025 - Presentation
Fostering economic growth and regional development
Berlin 12 June 2025
https://oe.cd/DEU
Note: Data are purchasing power parity converted and in current prices. Source: OECD National Accounts at a Glance; World Bank World Development Indicators database.
Reforms are needed to revive growth
Note: Data are seasonally and calendar-adjusted.
Source: OECD Quarterly National Accounts.
Note: The Economic Policy Uncertainty Index measures the extent of print media coverage related to policy-driven economic uncertainty.
General government net fixed capital formation % of GDP, 2024 (or 2023 if not available)
Note: OECD calculations based on OECD National Accounts database.
Compliance with fiscal rules is important to ensure public debt sustainability
Not
addressing rising spending pressures due to ageing
Complying with the national fiscal rules
Complying with the EU fiscal rules
Note: The “Complying with the national fiscal rules” scenario assumes that the structural budget deficit reaches 3.2% of GDP in 2027 and remains constant until 2037 and then declines to 2.2% due to the end of the new infrastructure fund. The scenario “Not addressing rising spending pressures due to ageing” builds on the “Complying with the national fiscal rules” scenario, but assumes that pension, health and long-term care related spending increases are debt-financed, leading to a deterioration in the structural primary balance of 3.5% of GDP by 2045. The “Complying with the EU fiscal rules” scenario assumes that during 2027-30 a four-year escape clause is applied allowing the full use of the 0.7% of GDP general government structural budget deficit limit and the debt-financing of additional defence spending of 1.5% GDP, and in 2031 the
Reforming the pension, health and long-term care systems is key to reducing spending pressures
Note: Projections for Germany based on latest policy announcements and following the methodology of Guillemette and Turner (2021).
Source: OECD Long-Term Model.
Strengthening competition to revive business dynamism and
innovation
Facilitating firm growth and market entry is key for stronger business dynamism and productivity
Post-entry growth rate of firms, after 3 years, %
Average of peer countries
Note: This figure illustrates post-entry growth of surviving entrants, calculated as total employment of all surviving entrants three years after entry divided by total employment at entry for the same firms, focusing on employer businesses. Entry is defined as the first year of activity with positive employment. Figures may differ from official statistics owing to data source and methodological differences. The average of peer countries includes an unweighted average of data from the following countries: Finland, France, Italy, Portugal, Slovenia, Spain and the United Kingdom. The data cover the period 2008-2022.
Source: OECD DynEmp (v3_2) database.
Further
reducing administrative burdens and regulatory barriers to competition is a key priority
OECD Indicators of Product Market Regulation (PMR), selected sub-indicators
Index scale of 0-6 from least to most restrictive (higher values indicate worse performance)
Germany, 2023
Germany, 2018
OECD, 2023
OECD, 2018
Note: The indicator entitled “Barriers to competition in professions and retail” is labelled “Involvement in business operations in service sectors” in the Product Market Regulation database.
Source: OECD Product Market Regulation database, January 2025.
Note: The indicator entitled “Consultation on legislation” is labelled “Interaction with stakeholders” in the Product Market Regulation database. Source: OECD Product Market Regulation database, January 2025.
Addressing skilled labour shortages
Addressing skilled labour shortages is important to lift growth
Note: Respondents were asked if their firm encountered any difficulties in recruiting employees in the last 24 months. Severe shortages occur if all or most (as opposed to some, few or none) of the opened vacancies in the firm were hard to fill. OECD is the unweighted average of the OECD countries on this graph.
Source: Filippucci, Laengle and Marcolin (forthcoming)
Note: The training participation of adults is the share of population aged 25-64 that participated in job-related training in the past month, 2022 or latest available year.
Improving educational outcomes is key to fostering economic growth and equality of opportunity
Note: The Programme for International Student Assessment (PISA) assesses the knowledge and skills of 15-year-old students in mathematics, reading and science. The tests explore how well students can solve complex problems, think critically and communicate effectively.
Source: OECD (2023), PISA 2022 Results (Volume I): The State of Learning and Equity in Education.
Reforming the joint income taxation of couples would improve work incentives for second earners
Note: The participation tax rate is the percentage of additional gross income that is withheld through taxes, social contributions, and benefit withdrawal when taking up a job, while the partner is already working full-time. The figure shows the participation tax rate for a married couple with two children when the main earner works full-time at 90% of the average wage and the other partner takes up 60% part-time employment at the same wage level. Calculations assume two children aged 4 and 6 and an annual rent equal to 20% of the average wage.
(Version 2.7.1).
Fostering regional development
Regional divides remain high
GDP per capita in districts, thousand USD, 2021
Range across regions Country average
Note: Range across regions indicates the variation across TL3 regions (Kreise for Germany). Country coverage is limited by the availability of regional data at TL3 level. Country averages are weighted by population across regions. GDP is measured in USD 2015 constant prices in purchasing power parities.
Source: OECD Regional Statistics database.
0.1 0.2 0.3 0.4 0.5 0.6
Source: OECD National Accounts database.
Improving digital infrastructure across regions would support greater adoption of digital technologies
Average download speed for fixed network in the regions, Mbps, first quarter of 2023
Range across regions National average EU-27
Note: The range across regions indicates the variation at the level of NUTS2 regions (Regierungsbezirk for Germany). “Mbps” refers to megabits per second.
Source: European Commission (2024), “European Commission Regional and Urban Policy Ninth report on economic, social and territorial cohesion”.
Main messages
Fiscal policy
Raise spending efficiency, reallocate spending and broaden the tax base, while addressing rising spending pressures due to population ageing to ensure fiscal sustainability.
Business dynamism
Reduce the administrative burden and regulatory barriers to competition to reinvigorate business dynamism, innovation and productivity growth.
Skilled labour shortages
Reviving business dynamism
Strengthen the work incentives of women, and low-income and older workers and continue to improve education, training and adult learning policies to address skilled labour shortages.
Regional development
Better coordinate place-based and industrial, infrastructure and innovation policies and improve the financial and administrative capacity of municipalities to foster regional development.
Disclaimers:
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