The German economy is growing as expected at the end of 2017. In the fourth quarter of last year, the GDP of the largest economy in Europe grew by 0.6%, but a little slower than the previous three months, when the indicator reported a growth of 0.7%. A positive contribution to growth in Germany has external demand. At the same time, the government spending increases while household consumption remains at the same levels as the previous period. A slight decline is reported for investment in construction.
For the whole of 2017, the German GDP rose by 2.2%, confirming the preliminary unadjusted data published in January. The calendar-adjusted data reported growth of 2.9% in Q4 2017. This is lower than the consensus forecast of 3.0%, but still the strongest growth rate since the second quarter of 2011.
The economy growth at the end of 2017 is actually the 14th consecutive quarter of the upward movement of GDP in the country.
The German economy remains strong with high levels of employment despite the rising Euro, which reduces the price competitiveness of exports. However, data show that German exports increased by 6.3% in 2017 compared to 2016 and imports increased by 8.3%. The both exports and imports have exceeded the record reached by 2016. Last year, exports reached 1.2794 trillion EUR, while imported goods amounted to 1.0345 trillion EUR.
The German government even raised its forecast for economic growth in 2018 from 1.9% to 2.4%.
In January, inflation in the country remained unchanged at 0.7%, reaching 1.6% on an annual basis, and remained unchanged. The weak inflation figures in Germany support the cautious approach of the European Central Bank to reduce unprecedented monetary stimulus.