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High employment rate propels German GDP
German economy rose 1.7 percent from last year, the German authorities said at the Berlin press meeting on Thursday. The hike in the German GDP was driven mainly by domestic spending and coordinated with the government's expectations. Germany's private consumption increased 1.9 percent in 2015 from 0.9 percent reported last year.
"The most important driver of growth was domestic consumption," the head of German Statistics Office, Dieter Sarreither, said in a statement.
Record-low interest rates and the diminishing energy prices contributed for Germany's strong performance and the economy also had a sublime help, Dekabank economist, Andreas Scheuerle said, Bloomberg. "We still have to deal with an incredibly rough patch globally. China plays a role, but also other emerging markets," Andreas added.
The European Central Bank anticipates German economy to rise 1.8 percent in the current year and 1.7 percent in 2017, Bloomberg added.
"German companies went through a year that dealt them a lot of uncertainty. They learned that the German economic machine can run smoothly even when there's turbulence around and that they can be confident in domestic demand driving growth, also this year. That said, risks have increased," Jens Kramer, an economist at NordLB in Hanover, told Bloomberg.
German exports rose 5.4 percent, while the imports accelerated to 5.7 percent from last year's 3.7 percent, according to the German Statistical Office. Household expenditure was high 1.9 percent, almost twice the last year's number.
"All in all, the German economy has once again defied many external headwinds and performed another solid growth year in 2015. The year 2015 clearly marks an important step in the rebalancing of the German economy, as private consumption turned out to be an important growth driver." abcNews quoted ING-DiBa economist Carsten Brzeski.
Brzeski said he anticipated German economy to carry on a "two-speeded recovery" in 2016, one in the lethargic industrial exports and production and other in the robust consumption and services.
The European Central Bank would retain its monetary policy accommodative, further boosting Germany growth and assets, EcoNoTimes said, citing sources.
In the January monthly report, the economy ministry of Germany said that the private consumption will continue to boost German GDP rate in the coming year. However, this growth is not maintainable as German economy is vulnerable in spite of being strong, according to Ulrich Grillo, president of Federation of German Industries.
Moreover, Germany's economy minister said that the country's GDP will benefit from the nuclear deal signed with Iran. The reports said the Sigmar Gabriel, economy minister of Germany, would visit Iran in May to pursue business opportunities.