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  • 1 min

The German economy on the way to normalization

  • 25 February 2019
  • Philippe Waechter
  • Gerùany
  • Private Demand
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German growth stopped during the second half of 2018. During this period, the GDP was up by only +0.1% compared to the first six months (at annual rate).
It can be seen on the graph that the main source of growth inflection is external demand. Its contribution fell sharply in the second half of the year. The slowdown in trade with China and Asia (a consequence of a Trump effect on Chinese trade) explains the stagnation of exports. But imports are growing rapidly due to a strong private domestic demand.
This is the major point of the graph. Until 2015, the contributions of internal private demand and external demand were of the same order. This is no longer the case and private demand is now the main contributor to growth and with a certain margin. The weight of foreign trade is still important in Germany, but it’s no longer the main source of the German dynamics.
The German economy is normalizing its structure and it becomes comparable to other developed countries where the main source of the GDP growth is the private demand. This shows a greater dependence on its internal market. This is not bad news for the Eurozone.

Related Topics
  • Gerùany
  • Private Demand
On the same topic
  • 1 min

The shock in the manufacturing sector in Germany: IFO vs Markit

  • 25 March 2019
  • Actus & Chroniques

Philippe Waechter

The modest rebound in the IFO index in March is sometimes interpreted as the counterpoint to the drop of the Markit index released last Friday.There is indeed an opposition in…
  • IFO
  • Manufacturing Sector
  • Markit
READ
  • 3 min

Growth: the Gallic village resists

  • 20 March 2019
  • France

Philippe Waechter

INSEE, the French statistical institute published its new forecasts for the first half of this year. (Its forecasts are just for a semester to avoid being in conflict with the…
  • Business Cycle
  • Growth Profile in 2019
  • INSEE
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  • 2 min

French growth's low momentum

  • 30 January 2019
  • France

Philippe Waechter

The French GDP growth was 1.1% (at annual rate) during the fourth quarter of last year. The same number than during the third quarter. Social unrest has had no impact…
  • GDP
READ
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