German Central Bank Says Economy Has Overcome Weakness

January 19, 2015 Share Print 0

The German economy, Europe’s biggest, has managed to shrug off faster than expected the period of weakness it experienced last year, the German central bank, or Bundesbank, said today.

“The German economy appears to have overcome the phase of weakness that emerged last spring more quickly than many people expected,” the Bundesbank wrote in its latest monthly report.

Among the positive factors contributing to this were the “markedly positive consumer climate – on the back of the favourable employment and income outlook – and falling energy prices,” the report said.

Business confidence had also improved in December, the Bundesbank said, pointing to the increased industrial output in October and November and a rise in factory orders.

After notching up growth of 0.8% in the first quarter of 2014, German gross domestic product (GDP) contracted by 0.1% in the second quarter and then expanded by a meagre 0.1% in the third quarter.

Fourth-quarter GDP data are not scheduled to be released until mid-February.

But the federal statistics office Destatis calculated in a flash estimate last week that the German economy expanded by 1.5% overall in the whole of 2014, suggesting that growth must have accelerated in the fourth quarter.

The main factors driving the recovery were rising exports, increased consumer and public spending a rebound in investment, Destatis said.

via RTE

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.