Spurred by Consumer Spending, German Economy Expands Again in 2011
The German economy grew by 3.0 percent in 2011 on 2010. This price-adjusted bump in gross domestic product follows an expansion of 3.7 percent the year before. When combined, the last two years demonstrate a dynamic recovery from and a strong response to the 5.1-percent loss experienced in the recession of 2009.
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German consumers open their wallets
(© dpa/pa/Beyond)
Although Germany is ever the strong exporter, domestic demand was the chief augmenter of its 2011 economy. Last year, people living in Germany consumed and invested more, while a staggering 41.1 million of them – more than ever before – held down jobs.
These latest statistics reinforce Germany's role as an anchor for stability and an economic growth engine for Europe. Despite the unsure waters of the European debt crisis, Germany again over-delivered in 2011. But even on its steady growth, the difficult situation around the continent and elsewhere took its toll in the last quarter of 2011. In November, industrial production dropped by 0.6 percent due to slackened demand and retail fell slightly. Although this final-quarter dampening could proceed into the yet new year, its degree will likely be mild and its effects temporary, only lasting through the winter months.
What should be remembered is that although the final quarter presented a hurdle, the German consumer responded to bolster a robust annual growth. In fact, consumer spending was the single largest factor in the 2011 upswing. Household consumption for the year increased by 1.4 percent in price-adjusted terms, while investments inside Germany jumped by 5.8 percent compared to the year previous. The largest portion of the investment pie came in building and equipment, like machines and appliances.
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Make your choice, please!
(© dpa/pa)
Buoyed by a boost in aggregate national income, which climbed by 3.5 percent in the year, it is no wonder Germans had more to spend and invest in 2011. But this was not the only factor. Germany is renowned for its exports, and 2011 saw an increase of 8.2 percent from 2010. Imports, too, gained by 7.2 percent in terms adjusted for price.
All told, Germans can look back at a consumer-driven 2011 that was more than twice as strong as the average German economy since the country's reunification, and, with that verve, carry vitality and well-being into 2012.