BERLIN: The German economy made a good start in 2016 and remained on a growth track despite uncertain global economic prospects, said German Economy Ministry on Friday.
“The basic driving forces of the German economy are still intact. The domestic demand provides reliable impulses,” said the ministry in its monthly report, referring to stable labour market, cheap oil prices, low interest rates and a weak euro.
It added that consumption remained an important pillar of Europe’s biggest economy.
In January, retail sales in Germany grew by 0.7 percent month on month. Industrial production went up by 3.3 percent, the strongest increase since September 2009. Germany’s unemployment also fell for the fifth consecutive month in February.
“Overall, the German economy is likely to increase further after the good start in the first quarter of the year,” the ministry said.
The German economy turned its growth engine to domestic demand from exports in recent years. In the final quarter of 2015, it expanded by 0.3 percent.
The German Economy Ministry said on Friday that an improved reading on consumers confidence index revealed Germans’ expectation on higher income and their stronger willingness to purchase.
However, recent figures showed a mixed picture of the German economy. German business morale deteriorated due to increasing uncertainties about the global economic environment. Orders for “Made in Germany” products have declined since December last year. In January, new orders fell by 0.1 percent. Exports also dropped by 0.5 percent in the month.
“The economic prospects of the world economy have deteriorated in recent months,” the ministry said. “Against this backdrop, the German exports remained slightly depressed at the year start.”
