German economy sees fastest growth in five years

After a tumultuous year, thrown off balance by the UK's shock Brexit result in June, Germany's Federal Statistics Office confirmed on Thursday that Europe's biggest economy's GDP expanded by 1.9 percent last year, when compared with 2015. That's Germany's strongest rate in half a decade and an improvement on the previous year when GDP grew by 1.7 per cent.

The office also reported a fiscal surplus of 0.6 per cent of GDP in 2016.

The data comes after the economy grew by 0.4 per cent quarter-on-quarter in the final three months of 2016 - double its third quarter expansion rate.

Successful rebound

According to the Germany's Ministry of Economics and Technology, the economy is being well-supported by a number of factors including a good labor market situation, rising incomes and consumer spending.

The low oil price and state spending - for example, on the accommodation of hundreds of thousands of refugees - also has also had a positive effect on Germany's economic situation. Unemployment remains at record lows, but inflation has been creeping upwards in recent month, hitting 1.7 percent in December. 

The ongoing real estate boom is also creating momentum for the German economy, with public coffers expected to have benefited.

Exports boost

The growth also adds to signs that the German economy has rebounded from the shock of Britain's plans to exit the European Union.

German GDP growth slowed to 0.2 per cent in the third quarter of 2016, after 52 percent of the UK voted to leave the EU in the June 23 Brexit referendum.     

Good news also came from Germany's exports on Wednesday, with November bringing Germany's most successful month on record. In the first eleven months of 2016, exports of goods rose by 0.8 percent to 1.1 trillion euros ($1.18 trillion) - meaning that 2015's record sum of around 1.2 trillion euros is within reach.

ksb/msh (Reuters, AFP, dpa)