Bun­des­bank sees Ger­man growth pick­ing up in 1Q 2016

The Pak Banker - - FRONT PAGE -

FRANK­FURT: Ger­man eco­nomic growth could pick up again mod­estly in the first three months of 2016, driven by ro­bust do­mes­tic de­mand, the coun­try's na­tional cen­tral bank said on Mon­day. "In the first quar­ter of this year, the Ger­man econ­omy could ex­pand at a slightly stronger rate than at the end of last year, pow­ered par­tic­u­larly by in­creas­ing in­ter­nal eco­nomic mo­men­tum," the Bun­des­bank wrote in its lat­est monthly re­port.

Ac­cord­ing to the pre­lim­i­nary data re­leased last week, Ger­many's gross do­mes­tic prod­uct (GDP) ex­panded by 0.3 per­cent in both the third and fourth quar­ters of 2015 af­ter grow­ing by 0.4 per­cent in each of the pre­ced­ing quar­ters. In the fi­nal quar­ter, the pos­i­tive im­pulses came pri­mar­ily from do­mes­tic de­mand, with state spend­ing up sharply and pri­vate house­hold grow­ing mod­estly, while lower ex­ports had a damp­en­ing ef­fect, the fed­eral sta­tis­tics of­fice Des­tatis said. On Mon­day, the Bun­des­bank pre­dicted that "in­creased mo­men­tum will come from con­sumer spend­ing" at the start of this year. With oil prices fall­ing fur­ther at the turn of the year, house­holds' pur­chas­ing power would pro­vide ad­di­tional im­pulses, the cen­tral ban said. The re­cov­ery in the con­struc­tion sec­tor was ex­pected to con­tinue thanks to favourable fi­nanc­ing con­di­tions. For 2016 as a whole, the Bun­des­bank is pen­cilling in growth of 1.8 per­cent, slightly more op­ti­mistic than the govern­ment's fore­cast of 1.7 per­cent.

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