Official statistics show that the economic growth of Germany in the last three months of 2013 has been driven to a huge extent by overseas trade.
The overall picture is that in the past two years, the performance of the German economy has deteriorated. This marked its slowest expansion since the beginning of the global financial crisis in 2008. According to the statistics, Germany’s GDP in the fourth quarter of 2013 was up with 1.3% compared with the same period in 2012.
A growth by 0.4% is observed in the quarter compared to the third quarter, according to German statistical agency. The main driver behind this increase is foreign trade which accounts for 1.1% points of the overall rise in gross domestic product. However, the figure was hurt with 0.7% by the weak domestic demand. Nevertheless, economic experts express their views that domestic demand will rise now, in the first months of 2014, compared with the end of last year. The reason for this expectation is that the high levels of job security, together with rising incomes will enhance consumer assurance. Also, very low inflation rates will further influence the expected stronger household spending growth in 2014. The government is forecasting a growth of 1.7%
Furthermore, the statistics show that the key economic mechanism in that specific period was the balance of export and imports.
The central German bank, Bundesbank, has stated that German economy is in good shape because of the low unemployment rate and wage growth which has reached normal levels again. Also, low interest rates had been boosting house building and private consumption in Germany, even though trade had been weakening.
Another factor which will assist German economy is other improvements that have been happening in the rest of the Eurozone and the US which are both big export markets. Thus, Germany might be able to outperform the rest of the Eurozone for the next coming years. It is important to note that despite some of these negative statistics, Germany’s economy continues to be a strong point of the Eurozone and has credit for the help it provided in the pulling the single currency bloc out of recession last year.