German Exports Powered Fourth-Quarter Economic GrowthAlessandro Speciale
German exports surged the most in three years in the fourth quarter, bolstering an expansion in Europe’s largest economy that was also supported by investment.
Foreign sales rose 2.6 percent in the final three months of 2013 from the previous quarter, while equipment and construction investment each climbed 1.4 percent, the Federal Statistics Office in Wiesbaden said today. German gross domestic product expanded 0.4 percent in the fourth quarter, it said, confirming a Feb. 14 estimate.
With business confidence at the highest level in 2 1/2 years and unemployment at a record low, Germany is providing the impetus to a fragile recovery in the rest of the euro area, its largest trading partner. The data will help European Central Bank President Mario Draghi decide whether more stimulus is needed to sustain growth in the 18-nation currency bloc.
“The German economy is actually in quite a good shape looking forward,” said Natascha Gewaltig, director of European economics at Action Economics in London. “That is also good news for the euro area as a whole.”
The euro-area economy expanded 0.3 percent in the fourth quarter amid stronger-than-expected expansions in France and the Netherlands and a return to growth in Italy. At the same time, manufacturing is showing signs of slowing and inflation is less than half the level of just under 2 percent that the ECB defines as price stability.
After saying at the beginning of the month that policy makers needed more data to assess the “complex picture” of the euro-area economy, Draghi said on Feb. 23 that the Governing Council will have “the full set of information needed for deciding whether to act or not” by its next policy meeting on March 6.
In Germany, government spending stagnated from the prior quarter and private consumption declined 0.1 percent, today’s report showed. Total domestic demand subtracted 0.7 percentage point from GDP, while net trade added 1.1 percentage points. Imports climbed 0.6 percent. GDP grew 1.4 percent from a year earlier when adjusted for working days.