Germany on the rise!

Gary Lineker, ex-FC Barcelona and Tottenham Hotspurs footballer and the Golden boot winning football superstar is credited for saying that football is a simple game, where twenty-two men chase a ball for 90 minutes and at the end, the Germans always win.

That is not a joke, just remember last World Cup in Brazil… Germany won the World Cup beating Messi’s Argentina in the final after thrashing Brazil in the semi-final 7-1. What looks like a joke about the football seems like a good parallel for the German economy.

Solid economic prospects

Germany rocks! This is was the European Commission’s ungraded winter economic forecast and the German Bundesbank’s bulletin are saying. And the hard data confirm it, both backward-looking like GDP and forward-looking like manufacturing and services PMI. 

First, it was the European % in and Commission’s Winter Economic forecast that has projected German GDP to rise 1.7% in 2017 and 1.9% in 2018 saying that the growth is supported by robust employment and consumption, the German economy is forecast to maintain its momentum over the forecast horizon.

The sound macroeconomic balance is underlined by budget surpluses and falling gross government debt that is currently seen falling to 62% of GDP in 2018.

Adding to rosy perspectives for Germany, Bundesbank opened the latest monthly bulletin by saying: “Germany’s steep economic upswing continues and in the third quarter of 2017 may well have maintained the brisk pace of growth seen in the first six months of the year.”

Hard data

And now the hard data. The preliminary reading for Q3 2017 German GDP saw economy advancing by 0.8% q/q while rising 2.3% y/y. Pretty solid number. The second estimate released today saw the preliminary figure confirmed saying the growth rate was driven by domestic demand. 

Positive contributions came mainly from domestic demand in the third quarter of 2017 with the household final consumption expenditure rising  2.1% y/y, while government final consumption expenditure was up 0.9% and Gross fixed capital formation in construction increased by 3.2% y/y.

The German manufacturing and services activity is booming also in the final quarter of 2017 confirmed by data from November PMI.

German manufacturing PMI rose to 81-months high of 62.5 in November while services PMI rose to 54.9 at the same time.

“The German economy is going great guns, with manufacturing enjoying one of the best growth spurts seen over the past two decades. Businesses are inundated with new orders, including sharp growth in manufacturing export sales, which is powering a strong and sustained spell of employment growth,” Phil Smith, principal economist and the author of the PMI report from IHS/Markit noted in the report.

It looks like German economy is going full steam ahead, pushing the whole Euro area up further and confirming the winning nature of it football players as noted by Gary Lineker.