German 2011 Economic Growth in Line With Predictions at 3.0%
THE TAKEAWAY: German GDP growth in line with predictions -> Germany remains Europe’s strongest player -> Merkel/Monti meeting props Euro
Germany today said that its economy grew by 3.0% in 2011. The figure was in line with expectations, but was lower than 2010’s 3.6%. Germany remains the largest and best-situated economy in the 17-member Euro bloc, with most of the other countries seeing drastically lower or even negative growth in 2011.
Moreover, today’s release underscores Germany’s unique and somewhat contradictory stance regarding the credit crisis. On one hand, the rest of Europe has depended on German economic strength to prop the value of the Euro in the face of a far-reaching debt crisis. On the other hand, the Euro crisis has also in a way benefitted Germany by decreasing the value of the Euro, which allows Germany to export more cheaply.
However, Germany has recently begun to struggle with weakened demand from economies on the European periphery, developments which have decreased export opportunities for the cornerstone German manufacturing sector. Today, German chancellor Merkel is scheduled to meet for summit talks with Italy’s leader Monti to discuss solution to Italy’s lagging growth and credit weakening.
The Euro was strong on the day on pre-summit optimism, but was seen as well offered on even the slightest of rallies given its weakness over the past weeks.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.