German Economy Expands In Q4
14 Februar 2018 - 5:52AM
RTTF2
The German economy grew as expected at the end of 2017, largely
driven by foreign demand, while inflation continued to ease in
January, data from Destatis revealed Wednesday.
Gross domestic product grew 0.6 percent sequentially in the
fourth quarter, in line with expectations, but slightly slower than
the revised 0.7 percent expansion seen in the third quarter.
At the same time, the calendar-adjusted GDP advanced at a faster
pace of 2.9 percent annually, after rising 2.7 percent. GDP was
forecast to grow 3 percent.
Similarly, price-adjusted GDP grew 2.3 percent versus 2.2
percent a quarter ago.
Positive contribution to sequential growth came mainly from
foreign demand. Government spending increased, whereas household
consumption expenditure remained roughly at the previous quarter's
level.
Gross fixed capital formation in machinery and equipment was
slightly up on the previous quarter, while capital formation in
construction was slightly down, Destatis said.
Destatis reported 2.2 percent growth for the whole year of 2017.
The provisional annual GDP result released in January has been
confirmed.
Commerzbank analyst Jörg Krämer said the upswing in the German
economy could continue for another two or three years despite the
roll-back of labor market reforms because cyclical tensions on the
labor market are not yet in sight.
Eurostat is set to release GDP data for the euro area at 5.00 am
ET. According to previous estimate, the currency bloc expanded 0.6
percent in the fourth quarter.
Destatis also confirmed that EU harmonized inflation in Germany
slowed to 1.4 percent in January from 1.6 percent in December.
With inflation and wage growth still subdued in the euro-zone's
largest and arguably strongest economy, the European Central Bank
interest rate hikes still seem like a pretty distant prospect,
Jennifer McKeown, an economist at Capital Economics, said.
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