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Strong exports, construction sector boost German

Strong exports, construction sector boost German

Data released today from the German economy showed improved levels of growth during the fourth quarter, better than expected, in light of strong exports and construction sector activity that helped the economy continue to grow despite the negative consequences of closures due to the Corona pandemic.

The German economy recorded a growth of 0.3% during the fourth quarter of last year, higher than expectations that indicated a growth of 0.1%, while the growth rate in the third quarter was 8.5%.

As for the annual GDP index, it continued to shrink by 3.7% during the fourth quarter, and the previous reading was witnessing a contraction of 4.0% and expectations indicated a contraction of 3.9%.

The statistics office in Germany indicated that the state budget recorded a deficit of 139.6 billion euros, or 4.2% of GDP, during 2020 as a whole, which is the first budget deficit since 2011.

The expansion in the fourth quarter came after a record quarterly growth rate of 8.5% in the third quarter and an unprecedented decline of 9.7% in the second quarter, due to the effect of Germany's first-time lockdown to slow the coronavirus pandemic.

The second shutdown imposed in early November on bars, restaurants and entertainment venues and expanded in mid-December to include most stores and services, caused household spending to drop in the fourth quarter.

On the other hand, exports recorded a growth of 4.5% during the fourth quarter, while household spending decreased by 3.3%. This means that net trade contributed 0.6 percentage points to the overall growth rate, while stagnant domestic activity deducted 0.3 percentage points.

The levels of the euro rose against the dollar during today's trading, and reached its highest level at 1.2173, after it opened trading today at the level of 1.2140, and is currently trading at the level of 1.2160.

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