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Strong trade figures boost German economic growth

Thursday, 11 May, 2017 - 17:01

The German economy is expected to show accelerated economic growth when GDP numbers are released on Friday thanks to buoyant trade and industrial production in the first quarter. Exports grew by 0.4 percent to an all-time high of €105.4 billion, while imports went up 2.4 percent to 85.8 billion. The higher import over export figures resulted in a narrower seasonally adjusted trade surplus of 19.6 billion, according to the data released by the economy ministry on Tuesday.

Industrial production fell by a less than expected 0.4 percent in March to record overall first quarter growth of 1.4 percent. The consensus among economists is for German GDP growth to hit 0.6 percent for the first quarter of the year, up from 0.4 percent in the final quarter of 2016.

An uptick in the economic fortunes of Germany’s Eurozone neighbours as well as continued growth in the US and Asia has seen German factory orders rise by 1 percent in March, against an expected increase of 0.7 percent.

The strong economic results will strengthen Merkel’s hand going into September’s elections, with latest polls showing her CDU party cementing its lead over the Social Democrats (SPD). A poll conducted by the Forsa Institute for Stern magazine and broadcaster RTL showed CDU support unchanged at 36 percent with their coalition partners the SPD up one point from the previous poll at 29 percent. The results raised the prospect of a so-called Jamaican coalition after September’s elections. Taking its name from the black, yellow and green colours of the Jamaican flag, it would see Merkel’s CDU forming a government with the pro-free market FDP and the Greens. The same three-way tie-up looks to be the likely outcome of last Sunday’s regional election in Schleswig-Holstein in which the CDU scored a surprise victory over the SPD with the Greens and FDP also polling well.


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