Private consumption is set to drive Germany’s growth in coming months and the construction activity likely will improve, while momentum in the industrial sector is likely to remain sluggish, the Bundesbank said in its latest monthly report, released on Monday.
In the first quarter, German economic growth eased to 0.3 percent from 0.7 percent in the final three months of 2014.
Rising employment and consequent increase in earnings, low-oil price driven strong purchasing power, and pension measures as well as minimum wage, boosted private consumption in the first quarter. These factors are likely to continue driving consumption in coming months, the report said.
The report put the blame on “a dent in the global economy” for curbing exports of German companies. A weaker euro could not offset this impact, the bank said. The favorable impact of a weaker euro on exports is expected to materialize with delay, it added. Imports increased in the first quarter.
Continued strengthening of the global economy and the lower euro could open up new export markets for German companies, the Bundesbank said.
The material has been provided by InstaForex Company – www.instaforex.com