Posted by WARREN MOSLER on January 12th, 2011
It’s been a long two decades, and 3.6% growth coming out of a 4.7% slump, slowing to 2% this year, isn’t anything to brag about.
And with the German dependency on exporting to the rest of Europe they’ll likely support continued ECB funding assistance.
The austerity measures, which make euro ‘harder to get’, combined with ECB funding assistance, which addresses default risk, also continue to fundamentally support a stronger euro.
And higher crude prices, which make dollars ‘easier to get’ off shore, work to both weaken the dollar and weaken US domestic demand.
By Christian Vits
Jan. 12 (Bloomberg) — Germany enjoyed its fastest economic expansion in two decades last year as booming exports spurred hiring and consumer spending.
Gross domestic product jumped 3.6 percent, the most since data for a reunified Germany began in 1992, after slumping 4.7 percent in 2009, the Federal Statistics Office in Wiesbaden said today. The figure was in line with the median forecast in a Bloomberg News survey of 28 economists. GDP probably rose 0.5 percent in the fourth quarter from the third, the statistics office said. The official fourth-quarter report is due on Feb. 15.
The Bundesbank expects Europe’s largest economy to expand 2 percent this year and 1.5 percent in 2012 as the sovereign debt crisis damps demand in the euro area, its main export market.
Germany’s Continental AG, the second-biggest tire maker in Europe, yesterday reported sales and earnings that beat its 2010 goals.
“The growth momentum continued into the first quarter and current forecasts might turn out to be too pessimistic,” said Klaus Baader, co-chief euro-area economist at Societe Generale in London. “The German economy will likely have returned to its pre-crisis level in the third quarter.”
The euro traded at $1.3032 at 10:13 a.m. in Frankfurt, up from $1.3005 before the GDP report.