So how well is Germany doing?

So how well is Germany doing?

German Economic Growth Fails to Gain Impetus (WSJ) Germany’s gross domestic product expanded 0.4% in 2013, following growth of 0.7% in 2012, the Federal Statistics Office said on Wednesday. The economy grew 0.5% when taking account of the number of working days each year. Based on the full-year figures, GDP increased around 0.25% in the three months through December about the same rate as the third quarter according to the statistics office, which is due to publish fourth-quarter national accounts in mid-February. Germany’s growth last year relied on domestic demand, as private consumption rose 0.9% and government spending increased 1.1%, the statistics office said. Net trade, however, reduced GDP growth, as exports the traditional driver of economic growth in Germany increased a meager 0.6%, while imports climbed 1.3%. Corporate investment was weak too, with spending on machinery and equipment down 2.2% from a year earlier.

Lagarde quote

They seem to think deflation causes weakness, rather than the other way around:

quote from Christine Lagarde, who heads the IMF “With inflation running below many central banks’ targets, we see rising risks of deflation, which could prove disastrous for the recovery. If inflation is the genie, then deflation is the ogre that must be fought decisively.”