BERLIN: Germany grew 0.7 per cent in the fourth quarter of 2014, much higher than expected, with domestic demand helping to lead to expansion in the year to 1.6 per cent and raising hopes for a strong 2015.
The quarterly GDP surpassed not only the median of expectations from a high of 0.3 per cent, as well as all individual projections. The growth rate in 2014 was above the estimate of January’s 1.5 per cent Statistics Bureau.
An economist at Unicredit Andreas Rees said that this is unexpected. The economic recovery in Germany started much earlier than expected. But instead Germany recovered. The fact that the growth coming mainly from domestic economy is strong basis for optimism.
Thanks to the strong end of 2014 we have a greater chance of seeing stronger growth than expected this year, which will help the rest of the euro zone.
Unadjusted data showed the economy grew 1.6 per cent in the fourth quarter over the previous year, also exceeding expectations of 1.0 per cent. The third quarter growth was confirmed at 0.1 per cent.
The Statistics Bureau said compared to the previous quarter the positive impetus came mainly from the domestic economy. The particular families have raised significantly new spending.
With annual inflation for a minimum of more than five years, falling oil prices and low interest rates, the Germans are choosing to spend than save.
