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This 2016 OECD Economic Survey of the Germany examines recent economic developments, policies and prospects. The special chapters cover: Boosting investment performance and Raising well-being in Germany’s aging society.

This annex summaries key recommendations made in previous Surveys and main actions taken since the OECD Economic Survey on Germany published in May 2014.

This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Germany were reviewed by the Committee on 29 February 2016. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 15 March 2016.The Secretariat’s draft report was prepared for the Committee by Andrés Fuentes Hutfilter, Andreas Kappeler, Naomitsu Yashiro and by Dorothee Schneider, who was seconded from the German Ministry of Economic Affairs and Energy, under the supervision of Andreas Wörgötter. Eun Jung Kim and Giovanni Maria Semeraro provided research assistance. Heloise Wickramanayake formatted and produced the layout. The previous Survey of Germany was issued in May 2014.

Non-residential investment has fallen over the past 20 years as a share of GDP and is now lower than in several other high-income OECD countries. Business investment growth has been weak since the outbreak of the global financial and economic crisis. Government investment has been low, especially at municipal level. Investment in knowledge-based capital (KBC), which is closely related to long-term productivity performance, has been subdued. Weak growth prospects in the euro area have weighed on business investment and an increasing share of firms invests in distant, more dynamic markets. Policies that strengthen stability and growth prospects in the euro area would raise the attractiveness of Germany as a location to invest, notably steps to strengthen the single market and cross-border infrastructure, and complete the banking union. Steps to liberalise regulation of services, in particular knowledge-intensive professional services, would raise investment and productivity. Policies that encourage the reallocation of resources would also increase investment in KBC. Poor municipalities invest relatively little and there is scope to lower the cost of public investment projects. Better use of e-governance and more performance-oriented budgeting could improve the efficiency and effectiveness of public investment.