Monthly Report December 2019 Vol. 71 No 12 Deutsche Bundesbank Monthly Report December 2019 2 Deutsche Bundesbank Wilhelm-Epstein-Strasse 14 60431 Frankfurt am Main Germany Postfach 10 06 02 Publishing schedules for selected statistics can 60006 Frankfurt am Main be downloaded from our website. The statis- Germany tical data are also published on the website. Tel.: +49 (0)69 9566 3512 The Monthly Report is published by the Email: www.bundesbank.de/kontakt Deutsche Bundesbank, Frankfurt am Main, by virtue of Section 18 of the Bundesbank Act. It is Internet: www.bundesbank.de available to interested parties free of charge. Reproduction permitted only if source is stated. This is a translation of the original German language version, which is the sole authorita- ISSN 0418-8292 (print edition) tive text. ISSN 1862-1325 (online edition) The German original of this Monthly Report went to press at 11 a.m. on 13 December 2019. Deutsche Bundesbank Monthly Report December 2019 3 Contents Commentaries .......................................................................................................... 5 Economic conditions ........................................................................................................... 5 Public finances .................................................................................................................... 8 Securities markets ............................................................................................................... 10 Balance of payments ........................................................................................................... 12 Outlook for the German economy – macroeconomic projections for 2020 and 2021 and an outlook for 2022 ............................................... 15 Underlying conditions for macroeconomic projections ....................................................... 19 The impact of the Climate Package on economic growth and inflation .............................. 29 German enterprises’ profitability and financing in 2018 .......................... 37 The evolution of German enterprises’ equity ratio ............................................................... 44 Profitability and financial position of listed groups in 2018 and an outlook for 2019 .......... 48 The relevance of surveys of expectations for the Deutsche Bundesbank............................................................................ 53 Survey concept of the Bundesbank Online Pilot Survey on Consumer Expectations in Germany ......................................................................................................................... 55 A comparison of the results of the Bundesbank Online Pilot Survey with existing surveys ... 58 Insights from the Bundesbank and Banque de France Joint Conference on Household Expectations ....................................................................................................................... 62 The mixing of euro coins in Germany ............................................................. 73 The coin mixture model ...................................................................................................... 78 Deutsche Bundesbank Monthly Report December 2019 4 Statistical Section.................................................................................................... 1• Key economic data for the euro area .................................................................................. 5• Overall monetary survey in the euro area ............................................................................ 8• Consolidated financial statement of the Eurosystem ............................................................ 16• Banks .................................................................................................................................. 20• Minimum reserves ............................................................................................................... 42• Interest rates ....................................................................................................................... 43• Insurance corporations and pension funds .......................................................................... 48• Capital market .................................................................................................................... 50• Financial accounts ............................................................................................................... 54• Public finances in Germany ................................................................................................. 58• Economic conditions in Germany ........................................................................................ 66• External sector .................................................................................................................... 75• Overview of publications by the Deutsche Bundesbank .......................... 85• Abbreviations and symbols e Estimated p Provisional pe Partly estimated r Revised … Data available at a later date . Data unknown, not to be published or not meaningful 0 Less than 0.5 but more than nil – Nil Discrepancies in the totals are due to rounding. Deutsche Bundesbank Monthly Report December 2019 5 Commentaries Economic conditions ate goods increased perceptibly (+½%), and the production of consumer goods fell only Underlying trends slightly (-½%), but the production of capital goods was down sharply (-5%). Together with German German economic output could stagnate in the mechanical engineering sector, car manu- economy could the fourth quarter of 2019. On the one hand, facturing, in particular, had a quite significant stagnate in the fourth quarter domestic economic activity proved remarkably adverse effect (-5½%), with bridge days pos- robust towards the end of the period under re- sibly exerting a somewhat dampening impact. view. This is because the situation in the labour This is suggested by the fact that, according to market is favourable despite the economic data provided by the Association of the Auto- slowdown. Most recently, employment even motive Industry (VDA), the number of passen- recorded a somewhat stronger rise again and ger cars manufactured in November was dis- unemployment declined. Consumption-related tinctly higher on the month after seasonal ad- services, in particular, should benefit from this justment, returning to the level reached in Sep- development. Retail sales fell significantly in tember. This indicates that there will be a October after a significant increase during the certain countermovement for motor vehicle summer months. However, enterprises in this output in November. sector still regarded their business situation as very good according to the ifo Institute, and In October 2019, industrial new orders were Industrial new consumer sentiment also remained upbeat. On not quite able to maintain the steep growth of orders down slightly the other hand, the decline in industrial output, the previous month, dropping slightly (-½%) in which is heavily dependent on exports, is likely seasonally adjusted terms compared to the to continue. This is due, in part, to the fact that September level. Compared with the previous enterprises in Germany are now probably more quarter, there was still a marked increase reluctant to invest. Economic activity in Ger- (+½%). However, this was mainly attributable many is thus expected to remain broadly split in to the typically irregular influx of large orders in the final quarter. In the meantime, however, other transport equipment, which will probably the first tentative signs are emerging that in- lead to higher output with a certain time lag. dustry could stabilise in the future. Business ex- Excluding these, incoming orders would have pectations in the manufacturing sector im- fallen noticeably (-¾%). Broken down by re- proved somewhat, for example, although they gion, German industrial firms suffered, in par- remain in negative territory. Furthermore, in- ticular, from overall weak domestic demand dustrial firms’ order situation did not deterior- (-3%). Moreover, the inflow of new orders ate any further in the past few months, and from non- euro area countries was clearly down exports were up significantly.1 on the previous quarter (-1¾%). By contrast, orders from the euro area rose sharply (+10¼%), with large orders for other transport Industry equipment playing a decisive role. With regard to the individual sectors, meanwhile, the order Steep drop in German industrial output continued to contract situation in the industrial sector improved on a industrial output unabated in October 2019 and was down sub- broad basis. Manufacturers of consumer stantially on the month in seasonally adjusted goods, for example, enjoyed a clear increase in terms (-1¾%). In a comparison with the aver- age of the third quarter, the decrease was even 1 For further information on the macroeconomic outlook, more significant (-2¼%). Output of intermedi- see pp. 15 ff. of this Monthly Report. Deutsche Bundesbank Monthly Report December 2019 6 demand (+1%). Producers of capital goods also Economic conditions in Germany* reported a marked improvement in new orders (+½%). It would have been significantly more substantial if the exceptionally strong growth in Seasonally adjusted other transport equipment due to large orders Orders received (volume); 2015 = 100 had not been offset by a steep decline in the Industry mechanical engineering sector. The