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'Made in Germany' goods help dodge recession

The Local · 15 May 2012, 08:38

Published: 15 May 2012 08:38 GMT+02:00

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The country has shown remarkable resistance to the eurozone crisis despite some of its closest neighbours and trading partners suffering crippling financial woes. Both exports and imports are at a record high as demand outside Europe for goods 'made in Germany' continues to grow strongly.

The German economy grew by 0.5 percent in the first quarter of the year, federal statistics office Destatis confirmed, after contracting at the end of 2011, dodging a recession defined as two consecutive quarters of negative growth.

These figures were much better than the market had expected. Analysts surveyed by Dow Jones Newswires had pencilled in growth of 0.1 percent but were instead faced with growth of 1.7 percent, which the statisticians noted was driven by trade and domestic demand.

Meanwhile, unemployment is near its lowest level since reunification in 1990, in turn boosting domestic consumption and reducing Germany's reliance on trade.

Germany suffered more than most from the international economic and financial crisis that worsened with the collapse of US investment bank Lehman Brothers - contracting nearly five percent in 2009 - but has since rebounded strongly.

Berlin is lagging slightly behind other big cities, though, and is forecast an increase of 0.7 percent for this year which is nonetheless still respectable compared with the eurozone as a whole.

Next year should see the growth rate more than double to 1.6 percent, according to economy ministry forecasts. And forward-looking indicators suggest Germany's future growth path will be firm, with the closely watched Ifo Business Climate Index rising for the past six consecutive months.

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The Local (news@thelocal.de)

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Your comments about this article

10:09 May 15, 2012 by puisoh
Uncompromising quality in the luxury class is the future if you want to survivie in export.

Yearssss ago, A Rolex top chief once said 'We are not in the watch business' when someone tried to rub shoulders and asked 'How is the watch business lately'.... from the book, 'What They Don't Teach You At Harvard'.

Potatoes and Lavender are just not enough!! And it is mind booggling how the Once Fashion leader of the world do not realise how they lost a huge part of its fashion industry to the rest of the world and only the luxurious big boys are alive aka LVMH, Hermes alike.
10:59 May 15, 2012 by smart2012
another overestimated statement to calm down markets... see below


If this is a growing country than I cannot read graph.... :-)
11:49 May 15, 2012 by michael4096
"If this is a growing country than I cannot read graph"

Well my reading of your graph is that Germany grew more than 2% in 2010 & 2011 and after one quarter's results is on track for similar growth in 2012. So maybe you are correct: you cannot read graph :-)
12:03 May 15, 2012 by smart2012
i guess u saw the wrong graph :-)


and compare German GDP to China Turkey etc.. So u could say "Made in China" works very well too???
18:52 May 15, 2012 by michael4096
The graph you reference both times is quite clear. Not only does it not say what you claim but it doesn't reference China, Turkey or any other country come to that.
19:21 May 15, 2012 by Beachrider
@michael, if you just go to the website, you can get all the charts. He didn't make that clear, though.

On the original post, attempts to isolate German buying when using a trans-national currency is a dubious strategy.
12:45 May 16, 2012 by mos101392
The "Made in Germany" label is misleading and false advertising. To be labeled "Made in Germany" only 10% of the product has to have been made in Germany. For the product to be 100% made in Germany, it has to have a certificate with the product.

So the next time you start salivating at the prospect of buying that new cookoo clock or BMW you need to ask yourself how much of it is actually German made.

I wonder if the Greeks would think the Germans hypocritical if they knew that the Germans can have up to 90% of a product made cheaper in China or Taiwan and attach a sticker that says "Made in Germany" and turn a profit on the product.
18:10 May 16, 2012 by voidplay

You can not compare the growth in China or other emerging economies with Germany.

If you invest in a highway in China it will increase productivity in those regions, and add to growth. If you do the same thing in Germany you will simply loose your money, because it will be redundant.

The so called 'recession' we are going though is simply the fact that most developed countries have grown beyond their means and in engaging in unsustainable global trade (think Greece globally).

We made leaps in the past Automobile, robotics, electronics, computers, IT, Mobile communication. Now we don't have enough innovation.

Part of the real problem is the inability of Govt or people to accept that slow down and shrinking is natural just like aging. If you cut the income of people in say Sweden by half they would still have the same per capita as that of Japan, and definitely a better lifestyle (space, clean air/water).

The Swiss are an extreme example, they get money from all over the world so investment isn't a problem, they have the infrastructure, expertise and access to all the worlds resources. But there simply aren't many people around the world you can afford Swiss products.
18:56 May 16, 2012 by raandy
mos101392 exactly, very misleading, maybe engineered in Germany would be more accurate.

German manufacturing has kept the nation above the recession line that most members of the union are below. The removal of the Euro ,however could easily put Germany into recession. The country is faced with limited options, to continue supporting bailouts, with no reasonable end in sight or the disorderly exit from the zone by members mired in debt that most likely will cause the collapse of the single currency and send world markets into turmoil.

I would be inclined to think that outside the EU economies will have to step in and provide a safety net to prevent this. This problem will become the world problem,which will have a much greater negative effect than merely market turmoil if not stemmed.
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