German Economy Returns To Growth
The German economy is the dominant economy of the Eurozone and the wider EU and is estimated to be worth approximately $4.2 trillion in 2019 – this is roughly the size of the second and third EU economies (France and the UK) combined. On a global scale, the German economy is the fourth largest in the world behind the USA, China and Japan.
Figures released for Q1 2019 show that the German economy has returned to growth with an expansion of 0.4% over the Q4 2018 figure. The economy experienced a contraction of 0.2% of GDP in the third quarter of last year narrowly avoided a technical recession by stagnating in Q4. If you prefer your data on an annualised basis, the Q1 2019 reading projects an annualised growth figure of 0.7% (year-on-year).
The German economic data was credited with a rally in the value of the Euro against other major currencies this week.
Spending by consumers in Germany and activity in the construction sector both picked up, but the government said that the economic outlook was being marred by continuing trade disputes with the USA and notably between the USA and China; both important markets for German exports. The USA is also said to be considering raising tariffs against European car imports, a major export of the German economy.
Commentating on the figures, Peter Altmaier, Germany’s Economy Minister, noted that the figures offered a “first ray of hope” but was cautious about the impact of global trade disputes: “The international trade disputes are still unresolved. We must do everything possible to find acceptable solutions that enable free trade”.
Unemployment in Germany currently stands at 3.2% whilst inflation is running at 2% (April), having spiked up from 1.3% in March on the basis of higher food and energy supply costs.