German economy ends 2015 on solid note

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(London Post)    Europe’s largest economy rang out 2015 on a strong note as robust domestic demand kept the German engine humming amid growing dissonance on global markets. But analysts warn the good times could soon be over.

The German economy grew by 0.3 percent in last year’s final quarter, keeping the pitch of the preceding three months, the Federal Statistical Office (Destatis) said on Friday.

“The economic situation in Germany was characterized by solid and continuous growth in 2015,” Destatis commented.

The new data also confirm a preliminary estimate released last month, showing the nation’s gross domestic product (GDP) expanding by 1.7 percent across the whole year.

The pace of growth slowed slightly as sluggish demand from key international markets such as China and Russia, which are both going through tough economic times, had a dampening effect on German exports. But strong state spending and private consumption helped stave off outside threats to the nation’s economic health.

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With this year’s forecast already looking increasingly bleak, analysts paused to savor the ray of positive news. “Without any doubt, the performance of the German economy since 2009 has been impressive. In 27 quarters, the economy only shrank three times,” ING DiBa economist Carsten Brzeski said.

But there are plenty of challenges ahead as the refugee crisis coupled with sluggish commodities prices and slowdowns in several key economies continue to pose serious risks. These “could all give the German economy a hard time,” warned Brzeski.

Eurozone holds steady

The eurozone also held steady despite the growing financial turmoil around the world.

Data released by EU statistics agency Eurostat on Friday showed quarter-on-quarter growth in all of the largest economies of the 19-member currency bloc. Spain led the way with 0.8 percent, while France and Italy logged slight improvements of 0.2 and 0.1 percent respectively.

However, those countries were outpacedby eastern members such as Estonia, Hungary, Poland, Romania and Slovakia, which all posted growth rates of at least 1 percent.

At the other end of the spectrum, Greece saw its economy contract by 0.6 percent.

Overall, the eurozone economy grew by 0.3 percent in the last three months of 2015, while GDP for the entire year rose by 1.5 percent.

Given the current climate, the positive growth figures came “as something of a relief,” said economist Jonathan Loynes of the Capital Economics research group.

In the wider, 28-country European Union, economies also expanded by 0.3 percent in the fourth quarter and 1.8 percent across 2015.

pad/hg (AFP, dpa)

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