New data lifts German growth outlook

 
Chris Papadopoullos
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THE GERMAN economy is set to bounce back from its sluggish start to the year, after figures released yesterday showed strong growth in the country’s industrial production.

Its trade surplus also widened, lifting growth prospects. Industrial production jumped 0.9 per cent from March to April. It left April’s annual growth rate at 1.4 per cent.

The German economy, which is the largest in the Eurozone, grew by just 0.3 per cent from January to March. If the economy continued to grow at that rate it would grow by just over 1.2 per cent per year. It also marked a sharp slowdown from 0.7 per cent growth in the final three months of 2014.

Industrial production growth is expected to remain strong due to positive surveys from manufacturing, its largest component.

A purchasing mangers’ index – a survey of private sector firms – pointed to expansion in manufacturing in May, according to financial information providers Markit. Germany is also set for a boost from its trade balance, the amount of exports over imports.

Exports grew by 1.9 per cent on the month in April, according to figures released by Destatis yesterday. Meanwhile, Germans imported 1.3 per cent less in April than in March. As a result, the country’s trade surplus climbed to €22.3bn (£16.4bn).

“German exporters are increasingly capitalising on the advantages of a weaker euro, as well as a global demand recovery,” said Berenberg economist Christian Schulz.