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Macroeconomic outlook report: Germany

Second quarter of 2017

In the second quarter of the year, the German economy grew at a 2.29% rate, recording an increase of 0.17 p.p. in its y/y growth rate when compared to the previous quarter. This performance is due to an acceleration of the domestic demand during the period, supported by private consumption and investment. The unemployment rate decreased to 3.77%, while growth rate of employment increased to 1.5%. The euro registered an appreciation against the dollar of 0.04 $/€ 2Q17, recording an exchange rate of 1.10 $/€

Macroeconomic overview

  • During the second quarter of 2017, German GDP registered an expansion of 0.17 p.p. in its y/y growth rate, standing at 2.29% at the end of the quarter. This performance is due to an acceleration of the domestic demand during the period, supported by private consumption and investment
  • Domestic demand registered an increase of 1.41 p.p. in its y/y growth with respect to 1Q17, standing at a growth rate of 3.11% during 2Q17. This was caused by the stronger y/y growth of both investment in machinery and equipment and in construction, as well as of private consumption.
  • The German labor market recorded a lower unemployment rate than in the previous quarter, thus registering a rate of 3.77% after a decrease of 0.33 p.p. in 2Q17. The y/y growth rate of employment increased from a 1.47% rate recorded in 1Q17 to 1.50% in 2Q17.
  • The euro recorded an appreciation against the dollar, with the exchange rate standing at 1.10 $/€ in 2Q17, which means an increase of 0.04 $/€ when compared to 1Q17. This appreciation of the euro against the dollar is due to the improved growth prospects of European economies and the uncertainty around the fiscal policy of the new US government.
  • During 2Q17, the inflation decreased by 0.20 p.p. with respect to 2Q17, up to a rate of 1.68%. The stabilization of inflation in this quarter was driven by the fading impact of the increase in commodity prices experienced in 1Q17.

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© GMS Management Solutions, S.L., 2018. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.