Germany’s 4th Quarter Growth Rose Due to Foreign Trades

The foreign trade rose by 0.6 percent for the last quarter in Germany, as the biggest economy, based on the data showed on Friday. The momentum is anticipated to continue in early 2018.

The data supports the preliminary reading,.implying that the German economy closed on a strong disposition in the previous year despite political uncertainty in the nation that proudly shows its stability.

The nation is still waiting for a new government, five months after the uncertainty in the election for September. Chancellor Angela Merkel’s conservatives and the Social Democrats (SPD) will form an alliance, however, SPD members could still reject the deal on the ballot.

German economy boosted because of exports as it rose by 2.7 percent in the quarter while imports increased by 2.0 percent that has contributed to a net trade growth of 0.5 percentage points. Government spending has increased by 0.1 percent growth.

However, private consumption has become a main source of support in the past years but it grew dull, as well as, the gross capital investment. Both did not contribute growth in the economy.

The finance ministry predicts the economic uptrend would persist in the beginning of 2018. Meanwhile, the business confidence levels expanded by 0.7 percent in the first three months of the year, according to the Ifo chief Clemens Fuest. Regardless of the threat due to the new election concerns if the SPD rejected an alliance with Merkel with the 464,000 members of the party. The total ballot of SPD is due to be published on March 4.

The monthly Ifo survey on Thursday implies a weakened confidence from businesses but maintains at an overall high level despite a stronger euro currency that affects the sentiment of exporters. Moreover, other recent surveys from the  private sector showed a slowed growth and weakened interest from investors.

When the household spending gained momentum in the first quarter, consumer morale peaked since 2001 while Germans are in advantage of a high employment capping the previous high, as well as, strong job security and rising real wages and low borrowing costs.

Nonetheless, there is an optimistic outlook from the central bank of Germany where the presumed value for this year will be 2.5 percent, which will be the highest rate growth over seven years.