Harvey Blackwood: Exports Fuel German Growth

Harvey Blackwood: Robust exports fueled strong growth in Germany’s economy towards the end of 2017 as inflation remained passive last month, indicating that Europe’s largest economy will continue its surge into this year.

In the fourth quarter of 2017, growth was at 0.6 percent which was on par with median forecasts and marginally lower than the downwardly revised 0.7 percent in the period from July to September.

Analysts at Shanghai, China-based investment house Harvey Blackwood say that German economic growth remains strong although it may be hampered by production holdups and capacity restraints.

According to the Federal Statistics Office, exports in the period from October to December came primarily from foreign demand and that provisional data showed that exports, on the whole, had increased substantially.

The Federal Statistics Office said that while government consumption expenditure expanded, domestic spending did not shift by much. The office is due to release more detailed data next week.

On a yearly basis, the German economy grew by 2.9 percent in the last quarter of 2017. This was less growth than the forecast 3.0 percent but still the best growth since the second quarter of 2011.

A Harvey Blackwood strategist said that Europe’s largest economy grew in 33 of the last 36 quarters at a strong average pace of 0.5 percent per quarter and that previous trends indicate the economy could continue to grow at this impressive pace for another year or two.

German inflation remains subdued and is giving further reason to the European Central Bank’s decision to remain cautious about withdrawing its monetary stimulus.

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