German GDP is expected to increase by 1.8 percent (2015), 2.2 percent (2016), and 2.3 percent (2017). With capacity utilization currently being at normal levels, Germany is on the road to overheating in the next years. GDP growth is backed by high growth rates in private consumption. In addition to the strong labor market that comes along with increasing employment and wages, temporary factors, such as low oil prices, lower income taxes, and higher transfer payments are further stimulating consumption in the current and the next year. Moreover, with increasing capacity utilization and very favorable financing conditions investment is expected to pick up over the forecast horizon. Exports are expected to regain momentum after a weak second half of the current year due to solid GDP growth in other advanced economies and strong gains in price competitiveness due to the depreciation of the euro. Additional government expenditures due to the high number of refugees will stimulate GDP growth somewhat but will not become a main driver of business cycle dynamics in Germany.