German economy switches gears, domestic growth leads the way

November 22, 2013

Reuters’ Michelle Martin reports that German GDP grew 0.3% in the third quarter, thanks to some welcome domestic growth. Here’s Reuters’ chart of recent German GDP growth and its components:

Significantly, Martin writes, “net trade deducted 0.4% points from third-quarter growth.” The European Commission is investigating the German economy’s alleged over-reliance on exportsUS Treasury Department tied Germany’s export-led economic strategy to slow growth elsewhere in Europe.

Separately, Martin reports that a poll of 7,000 companies showed German business sentiment “surged to its strongest in a year and a half in November”.

On Tuesday, the ZEW survey of showed the confidence of German institutional investors was at a four-year high. Martin writes the ZEW survey “suggested the economy could expand by 0.5% in the fourth quarter”.

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Could our government take lessons from Germany? Yes – but will it? We now have Obama running around to donors on more fundraising trips and trying to tell us the economy is getting soooooo much better.

Posted by AZreb | Report as abusive