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11 January 2018
 |
| Germany government (The Total Investment & Insurance Solutions) |
The German economy accelerated last year to grow by 2.2 percent, putting
in its strongest performance for six years thanks primarily to increasing
demand at home, official data showed Thursday. The Total Investment & Insurance Solutions
The figure released by the Federal Statistical Office was the strongest
since 2011, when Europe's biggest economy grew by 3.7 percent. Gross domestic
product expanded by 1.9 percent in 2016 and 1.7 percent in 2015.
Household spending by Germans was up 2 percent last year, while
investment in machinery and other equipment was up 3.5 percent.
Exports — a traditional strength of the German economy — grew by 4.7
percent, a much stronger performance than the previous year's 2.6 percent. But they
were outpaced by imports, which expanded by 5.2 percent, up from 3.9 percent in
2016. Overall, foreign trade contributed only 0.2 percentage points to last
year's GDP growth. The Total Investment
& Insurance Solutions
Eight consecutive years of growth have also boosted Germany's public
finances. Germany had its fourth budget surplus in a row last year, totaling
1.2 percent of GDP, according to Thursday's report. That was up from 0.8
percent the previous year as growth in the state's income outpaced increased
spending.
The statistics office offered a rough estimate that the economy grew by
a bit more than a half-percent in the fourth quarter compared with the previous
three-month period. However, it won't release an official figure until
mid-February, after data for December become available. The Total Investment & Insurance Solutions
The same things that helped German growth in the last two years should
remain in place this year, said Carsten Brzeski, an economist at ING-DiBa — low
interest rates, a relatively weak euro, strong domestic momentum and a
recovering eurozone economy. But he pointed to signs of weakness in areas such
as digitalization, services and education and called for the incoming
government to tackle those. The Total
Investment & Insurance Solutions
A major German business group called for more investment in education
and infrastructure. Martin Wansleben, the Association of German Chambers of
Commerce and Industry's chief executive, said there also should be financial
"relief for companies, in any case no tax increases."The Total Investment & Insurance
Solutions
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