Mario Blascak, PhD
Independent Analyst
The German economy is growing full speed. German GDP rose 0.8% in Q3 after rising 0.6% and a revised 0.9% during the first quarter of this year. Compared to July-September period last year, GDP rose 2.3%.
According to statistics, the growth was driven by public consumption, investment and net exports. Only the construction sector took a summer vacation break. The news of German robust growth in Germany is underlined by the fact that even with stagnating GDP in the final three months of 2017, GDP growth for the whole year of 2017 would still come in at 2.4%; the highest reading since 2011.
Germany enjoys the favorable economic conditions including rising global demand, low unemployment rate, and ultralight monetary policy. The German economy is currently showing its best performance over such a long period since the mid-1990s.
The macro picture in Germany is favorable also in terms of low inflation that decelerated to 1.6% in October. While low-interest rate, low unemployment rate, and low inflation environment are particularly favorable for private consumption, rising global demand is positive for net exports to contribute to the growth positively.
On the business side of the story, German local courts reported 4.3% y/y decline in the number of business insolvencies in August 2017, with only 1.7K business insolvencies in Germany only.
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