The upturn in the global economy accelerated in 2017 as the global gross domestic product increased by 3.7 percent, which was higher than the International Monetary Fund (IMF) anticipated at the start of 2017. The gain showed that the economy was largely unaffected by the numerous political uncertainties that marked global events during the year under review. This applied, in particular, to global trade, which expanded substantially.
During the course of the year economic development within the euro area became increasingly dynamic resulting in a 2.4 percent increase in gross domestic product. The upswing was mainly driven by rising exports as global trade picked up and domestic demand remained strong.
The German economy also flourished as its gross domestic product increased by 2.2 percent in 2017, which was a stronger gain than in the previous year. The strongest drivers were private consumption followed by public-sector investments, and capital expenditures. In addition, the export sector grew notably to make a favourable contribution to the economy. Investments in construction also developed favourably and increased by 2.6 percent. The greatest gain of 3.1 percent was noted by investments in residential housing. Investments in construction within the public sector rose by 2.7 percent while investments in construction of commercial property increased by 1.4 percent.
The annual average rate of inflation rose to 1.8 percent, the highest rate noted since four years. Energy prices grew by 3.1 percent and were the primary reason behind the increase. Furthermore, food prices were notably more expensive than they had been in the previous year.
Development seen in the labour market also reflected the favourable economy as the annual average number of employed persons rose by over 600,000 to 44.3 million. The unemployment figure fell further as the average number of unemployed persons reported was 2.5 million, or more than 150,000 less than in 2016. The unemployment rate fell by 0.4 percentage points to 5.7 percent.