Germany Faces Some Short-term Weakness

The Organization for Economic Co-operation and Development (OECD) has just released its economic survey on Germany. On one hand, the report lauds the country’s resourcefulness in getting through the economic downturn of the past three years in much better shape than most other developed countries. On the other hand, the country faces some challenges over the next couple of years.

In virtually every measured category, Germany is not expected to perform as well in 2012 as it did in 2011 — and not by just a little either. For example, exports grew 8.2% year-over-year in 2011, but that drops back to 3.4% growth in 2012 and recovers slightly to 6.6% in 2013.

The report notes that Germany needs to focus on three areas of structural policy:

• Strengthen domestic demand
• Raise labor input
• Exploit growth opportunities in the green economy

A brief overview of the report is available here. The entire report is available for purchase at the OECD web site.