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FXStreet (Barcelona) - Carsten Brzeski, ING Economist notes that German GDP was a positive first estimate surprise which showed that the economy ended the year better than expected.

Key Quotes

“According to the German statistical office, the economy grew by 0.4% QoQ, from 0.3% QoQ in 3Q. On the year, German GDP is up by 1.3%. , from 0.9% in 2Q. The individual growth components will only be released at the end of the month but available monthly data and the statistical office’s press release suggest that growth was driven by exports and domestic investment.”

“Is the German economy finally picking up? Recent monthly data had painted a rather confusing picture with strong soft data but disappointing hard data. Today’s growth outcome is actually better than monthly hard data had suggested. Looking ahead, the German economy should gain further momentum. Filled order books and the latest inventory reductions bode well for industrial production in the coming months.”

“Moreover, the construction sector, driven by the mild winter weather and government investment, should be growth-supportive throughout 2014. Finally, the strong labour market and latest wage increases should further back domestic demand. Let’s not forget, without any quarterly growth at all, the German economy would already grow by 0.5%-0.6% YoY in 2014 due to the so-called carry-over effect.”

“Germany remains the economic stronghold of the Eurozone. In fact, this morning’s data was one of those positive surprises the Eurozone has seen too seldom over the last few quarters. Let's hope it won't be the last one.”
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