According to the Federal Statistical Office, the German economy recorded quarterly growth of only 0.25% in the final quarter of last year. The marked improvement in business surveys of late suggests that gross domestic product will notch up an appreciably higher increase in the first quarter of 2014. We are penciling in an increase of 0.5-0.7%. Over the course of the year the economic engine is not likely to stall either, with average growth of around 2% on the cards for 2014.
A strong push is likely to come from exports, which look set to increase by 4-5% on the back of the pickup in world trade and the economic recovery in the eurozone. The current low level of inflation is bolstering purchasing power. This will boost real consumption, which will probably rise by a good 1.5% in 2014 after only 0.9% in 2013.