German Economy Records Strongest Growth in 2 Years

German Economy

In the first three months of the year 2016, German economy grew at its fastest rate in two years, outpacing the seven most industrialised countries according to SuddeutscheZeitung reports. The GDP expanded by 0.7 from the previous 0.3 percent in calendar-adjusted terms from January to March. It was, in fact, very fast and superceded the 0.5 percent experts had projected for the first quarter of the year. This economic boost is reportedly a result of robust domestic demand. The government and private households also made their contribution by increasing their investments and spending. This was confirmed by Destatis, the federal statistics office.

The mild weather is said to have boosted the construction sector activity and increased the investment of equipment. Foreign trade registered a moderated dampening effect given that exports did not grow faster than imports. That means that the overall trade surplus fell. On the basis of 12 months, the GPS reportedly expanded by 1.3 percent between January and March as opposed to the same period a year earlier. This data on the German economy is still preliminary. Look out for a more detailed breakdown on May 24.

Economists have hailed Germany’s huge performance citing that it was indeed a big mileage for the economy. Although much credit has been given to the weather; the recovery would have gathered pace even without it- according to the UniCredit economist Andreas Rees. Dirk Schlotboeller, a DIHK federation of chambers of commerce economist, was quick to say that the combination of several factors including increased spending associated with the refugee crisis, the mild weather, and the cheap oil prices may not have a repeat any soon. Carsten Brzeski, an economist, pointed out that the economy had been trying to recover for seven consecutive years. As a result of falling energy prices, Destatis confirmed a preliminary estimate for inflation. It showed a 0.1 percent drop in April’s consumer prices.