Humming along: Germany’s economy
Since the global financial crisis Germany’s economy has been the heart pumping up the eurozone’s anaemic growth rate. On Friday, the government releases its latest unemployment figures, and they’re expected to be robust. Leading financial institutions reckon that the number of unemployed has sunk by 70,000 since January, and they forecast a further fall this year. The economy is forecast to grow by 1.4-1.6% this year.
Germany is profiting from the current uptick in global growth, which increases demand for its exports. Company bosses haven’t been this optimistic since 2011, and the construction sector is doing better than at any time since the reunification boom in 1991. This enthusiasm doesn’t extend much beyond the country’s borders: the IMF and European Commission are urging Berlin to invest more at home to reduce its massive current account surplus.
The Trump administration has also criticised Germany for its economic over-performance, with the president even making noises about a 35% tariff on imported BMWs. However, this political risk – along with Brexit and French elections – has failed to shake German business confidence. The year is still young though, and these risks could yet begin to lug the Teutonic economic engine.
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