The Misconception that “Because it grows faster, Germany should invest more than France”

​The German economy has outperformed the French economy in recent years. Capacity utilization in the German manufacturing sector is above its long-term average. Thus, one could expect higher investment activity in Germany.

Yet in 2016, the investment-to-GDP ratio stood at 22% in France, and only 20% in Germany. The French public and corporate sectors have higher investment ratios than their German counterparts (+1.3 pp and +1.0 pp, respectively).​