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Although the underlying pace of German economic activity remains high, the Bundesbank believes it is likely to be lower than that suggested by GDP growth in the fourth quarter of 2014. Despite disappointing results for industrial activity, according to the current issue of the Monthly Report, the upswing process, which got into gear at the end of last year, has not been interrupted.

Private consumption is likely to remain the main driver of the fairly strong economic growth overall, according to the Bundesbank’s economists. This is implied by the strong increase in retail sales. Owing to the exceptionally favourable consumer climate, the Bundesbank expects this development to last for some time.

According to the Bundesbank, sentiment in trade and industry has remained subdued despite a perceptible recovery. Although the moderate upward tendency of industrial output persisted, growth of new orders received by industry took a breather in the first two months of the year. Sales of German industrial goods to euro-area and non-euro-area non-residents alike grew sharply. However, sales growth was less strong within Germany.

Additional main topics

In addition to economic trends, the April issue of the Monthly Report discusses the development of labour market-related government expenditure. It also looks at structural developments in the German banking sector following the wave of financial market deregulation in the 1990s. Current data and trends concerning transaction balances of euro coins in Germany constitute the report’s third main topic. Such balances include coins held in consumers’ wallets, change held in retailers’ cash registers, coins in vending machines and cash balances held by credit institutions.