Is the German question driving the German economy now?
Germany's GDP grew by 1.6% in the second quarter of 2021 compared to the previous quarter. On an annual basis, the German GDP increased by 9.4%. But the Bundesbank …
The German economy grew more-than-expected in the second quarter of the year on the back of the easing of anti-Covid-19 restrictions that spurred consumers to tap into record savings accumulated during the winter lockdown, while the state put 'gasoline'. with a huge stimulus financed by debt, underlines in a point of the Agi news agency directed by Mario Sechi.
On an annual basis, the German locomotive expanded by 9.4% in the second quarter, leaving economic activity 3.3% below the pre-crisis levels of the fourth quarter of 2019. The German economy is instead, it grew by 1.6% compared to the previous quarter. The figure has been revised upwards with respect to the preliminary estimate.
Private consumption grew by 3.2% between April and June, contributing 1.6% percentage points to overall growth and pushing the savings rate to 16.3%. In the first quarter, when shops, bars and restaurants were closed, that rate hit an all-time high of 22%. Public consumption expanded by 1.8%, contributing to the overall growth rate by 0.4%.
State spending to cushion the impact of the coronavirus crisis, financed with unprecedented new loans, created an 80.9 billion euro (95 billion dollars) hole in public finances in the first half of the year. This equates to a public sector deficit of 4.7% of GDP, which has been at the top for 26 years.
Ing Bank's Carsten Brzeski called this "the downside of rapid economic recovery". "The stimulus should help bring the economy back to pre-crisis levels before the end of 2021, but it will leave the new government with a heavy burden to bear".
However, the Bundesbank is showing caution as it looks ahead to the next few months. According to the German central bank, economic growth in the country could miss projections for this year and the new peak of the coronavirus pandemic could put unexpected pressure on the economy in the autumn. “In general – explains the central institute in its monthly report on the economic situation in Germany – it remains to be seen whether the GDP will return to its pre-crisis level already in the summer or only in the autumn”. Due to the Delta variant – the experts point out – expectations in the hotel sector have decreased and private consumption has not resumed as expected.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/sorpresa-la-domanda-tedesca-traina-ora-leconomia-della-germania/ on Tue, 24 Aug 2021 13:51:59 +0000.