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Domestic demand keeps Germany driving euro zone

Tuesday, August 15, 2017 - 01:27

Strong household spending, rising state expenditure and higher company investments consolidated Germany's role as the euro zone growth engine in the second quarter, although accelerating imports meant growth came in just below expectations. Sonia Legg reports

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She's not having it all her own way on the campaign trail. Opposition supporters have been out in force and they're very vocal. But Angela Merkel is still well up in the polls and its a similar story with the economy. Latest GDP numbers - at 0.6 percent - were slightly lower than expected. But companies did invest more in the second quarter and state investment was up - so too was household spending. (SOUNDBITE) (English): JAMES HUGHES, SENIOR MARKETS ANALYST, GKFX, SAYING: "The numbers aren't necessarily at the highs that we expected them to be but we are still in the 12th consecutive quarter of growth and the economy is still very much the shining light of the euro zone and still continues to bring that higher." In some ways the lower figure was a relief. It eases the pressure on the ECB to end its ultra easy monetary policy. (SOUNDBITE) (English): JAMES HUGHES, SENIOR MARKETS ANALYST, GKFX, SAYING: "The stimulus currently that Mario Draghi is putting into the economy is helping the euro zone. Yes, but there is still this fear of an overheating German economy if this stimulus still does continue to go on." Trade held the official figures back - exports rose less strongly than imports . And some revisions to the GDP figures suggest real growth may actually be higher. But either way Merkel doesn't have too many economic issues to worry about. And polls show while her conservative party will need a coalition partner after next month's election - it'll easily be the largest party.

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Domestic demand keeps Germany driving euro zone

Tuesday, August 15, 2017 - 01:27