After the year got off to a moderate start, the German economy rebounded quite strongly in the second quarter of 2018. The Bundesbank believes that the German economy is likely to remain on a sound growth path in the current quarter. However, as is explained further in the August issue of the Monthly Report, the pace of growth could tail off slightly.

Historisch niedrige Zinsen auf Bankguthaben, fallende Wertpapierrenditen und eine Inflationsrate von etwa 2 Prozent lassen die reale Gesamtrendite der privaten Haushalte in Deutschland erstmals seit sechs Jahren wieder in den negativen Bereich sinken. Zu diesem Ergebnis kommt die Bundesbank in ihrem aktuellen Monatsbericht. Dennoch ist das private Geldvermögen in Deutschland nicht geschrumpft, weil die Sparer weiterhin einen aktiven Vermögensaufbau betrieben haben.

The German economy continued to expand at an above-average rate in the second quarter of 2018. According to provisional data from the Federal Statistical Office, gross domestic product rose by 0.5% on the quarter after adjustment for price, seasonal and calendar variations.

The dining room designed by Victor Vasarely and his son Yvarel and located on the 13th floor of the Bundesbank’s Central Office is to be loaned to the Städel Museum in Frankfurt. There it will be on display from the end of September before being exhibited at the Centre Pompidou in Paris.

In the first half of 2018, the Bundesbank registered approximately 31,100 counterfeit euro banknotes with a nominal value of €1.8 million – 6.2% fewer than in the previous six months. The most frequently counterfeited denomination was the €50 banknote.

The Bundesbank’s Research Centre has published a new research programme, offering a thematic overview of ongoing and planned research activities in the areas of monetary policy, financial stability and banking supervision.

The Bundesbank estimates that the German economy gained somewhat more momentum in the second quarter of 2018 than it had at the beginning of the year. This was due not only to stronger industrial activity but also to the ongoing construction boom and private consumption.

The International Monetary Fund reports that the German economy can look forward to the expansion continuing in the near term, but warns in its Article IV Consultation that external imbalances could cloud the upbeat outlook over the medium term.

Bundesbank President Jens Weidmann has defended the definition of price stability over the medium term as maintaining inflation rates of below, but close to, 2% in the euro area. Speaking at a joint conference of the Bundesbank and the Banque de France in Paris, Mr Weidmann waded into the debate on setting a higher inflation target and warned of the impact that such a target could have on macroeconomic stability.

The current June Bundesbank Monthly Report contains an article on the debate about raising the inflation target. Those in favour of this argue that a higher target rate of price increase would provide central banks with more room for manoeuvre for monetary policy countermeasures in times of crisis. The Bundesbank’s economists contend that the negative implications of a higher inflation target are largely being ignored in this debate.