German growth still solid and expanding
The Local · 23 Nov 2010, 11:35
Published: 23 Nov 2010 11:35 GMT+01:00
The Federal Statistics Office confirmed previous expectations that the gross domestic product grew 0.7 percent in the third quarter, adjusted for price, season and calendar, which equates to 3.9 percent year-on-year growth.
But importantly, the growth is now on a broader base, being fuelled to a greater extent by domestic consumption – a fact that should dampen criticism from abroad about Germany’s reliance on exports.
“A golden boom-autumn is following the great rebound summer,” Brüderle said in Berlin.
While the rebound had been triggered by strong export growth, the domestic economy was now growing ever stronger, he said.
“There is investment again, activity is picking up dynamically, incomes are rising and private consumption is increasingly supporting growth in Germany.”
Private and public consumption, gross investments and exports contributed to the GDP growth, the statistics office said. Private and public consumption grew by 0.4 percent and 1.1 percent, respectively, compared with the previous quarter, while gross investments grew by 1.3 percent. Exports accounted for 0.3 percentage point of gross domestic product growth.
Germany has been the target of tough criticism from neighbours such as France, and other countries including the United States, for its dependence on exports, producing a massive trade surplus. Other countries say this harms their own growth because Germans are not buying enough products from abroad.
But economists have said for some time now that the rebound was broadening in Germany to include stronger domestic consumption.
While the overall rate has slowed compared with the stellar 2.3 percent rise between April and the end of June, the 0.7 percent figure still represents solid growth.