Germany: Economy expands at fastest pace in two decades
January 12, 2011
In 2010, Germany's economic growth gained steam, expanding at the fastest pace in over two decades. According to preliminary estimates from the National Statistics Institute (Destatis), GDP expanded 3.6% in 2010, bouncing back from a 4.7% contraction in 2009. The preliminary data set is still subject to revision and more detailed data for 2010, including fourth quarter results will be published on 15 February. The rebound in 2010 reflected both strong domestic demand and a more dynamic external sector. While government consumption slowed somewhat to a 2.2% expansion in 2010 (2009: +2.9%), private consumption bounced back from a 0.2% contraction in 2009 to a 0.5% increase. Moreover, fixed investment swung from a 10.1% contraction in 2009 to a 5.5% expansion in 2010. Exports of goods and services grew at the fastest pace on record, posting a 14.2% expansion (2009: -14.3%). Imports, which profited from rebounding domestic demand, rebounded from a 9.4% fall in 2009 to a 13.0% expansion last year. The Bundesbank anticipates that economic growth will moderate to 2.0% this year before declining further to 1.5% in 2012. Meanwhile, the government revised its growth estimates for this year and now expects economic activity to rise 2.3% this year, up from its previous estimate of 1.8%.
Author: Ricardo Aceves, Senior Economist