German economy faring very well in January

According to the Federal ministry for economic affairs, the German economy is in a very good shape at the beginning of the year 2008. In 2007 Germany´s economy grew considerably. GDP increased by 2.6% after adjustments for price and calendar. Thus, the forecast by the German government was slightly exceeded. Employment increased by 649.000 people or 1.7% to 39.7 million on average. For the first time since the German reunification the budget of the public sector was in balance.

The contribution of foreign trade to GDP´s growth was 1.4% while the domestic contribution amounted to 1.0%. Despite VAT increase, increased crude oil prices, weakness of the dollar, real estate crisis in the USA as well as turbulences on financial markets the economic upswing continued in 2007.

Internal and external driving forces to the Germany economy are still acting. The global economy keeps growing even though not as dynamically as in recent years. Domestic investment keeps being robust and there are signs for private consumption to increase in 2008. Therefore, it is very likely that the upswing of the German economy continues even though it may not be as dynamic any more due to certain negative factors.

Selected data on the economic situation are available on in the internet. Further information is provided by the monthly “Schlaglichter der Wirtschaftspolitik” report for January 2008 (download), the monthly report parts II “Wirtschaftliche Lage” and III “Übersichten und Grafiken”. GERMAN