German Economy Grows at Fastest Pace in Two Decades

Aug. 13 (Bloomberg) -- Germany’s economy grew in the second quarter at the fastest pace since the country’s reunification two decades ago as the global recovery boosted exports and companies stepped up investment.

Gross domestic product, adjusted for seasonal effects, rose 2.2 percent from the first quarter, when it gained an upwardly revised 0.5 percent, the Federal Statistics Office in Wiesbaden said today. That’s the fastest growth since records for a reunified Germany began in 1991. Economists predicted the economy would expand 1.3 percent, the median of 33 estimates in a Bloomberg News survey shows.

Europe’s largest economy is benefiting from a recovery in global demand after last year’s recession just as the euro’s 10 percent decline against the dollar this year makes its exports more competitive outside the currency bloc. At the same time, governments across the 16-nation euro region are cutting spending to rein in ballooning budget deficits, threatening to slow growth in coming months.

“The German economy will reach its pre-crisis level much earlier than thought, around the end of 2011,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. “The growth momentum will cool down in the second half but that’s normal after such a phenomenal upswing.”

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aM8Ldv5ixJ4o&pos=1

With austerity measures in full force, GDP will come down in Q3. Question is : by how much ? Uncle Trichet and uncle Ben seem to be devided on this front. Uncle Trichet expects no meaningful deterioration...

 

Germans pay higher taxes than we do and have healthcare so how is this possible??

 

How come all the european economies are growing and companies are making records profits great earnings, but the sentiment is so BAD out there and consumers are cutting back.

There is a dichotomy here.

 

Eurozone is benefiting form the low value of the euro last quarter. Especially Germany. Not all Eurozone countries are growing, mainly just Germany and France (although I think I ready Italy had a slight uptick as well).

As the euro gains strength and government's cut spending the GDP numbers will inevitably come down.

 

Agreed. And Italy has apparently "ticked up" for the interim.

 

I am suspicious of this story but they are reporting the growth rate not GDP, and the growth rate might be high during the early stage of an economic recovery.

I recall the German economy did not experience a real estate bubble like the USA, Spain and Ireland did.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2923753 \img>

 

S C R E A M I N G long-term T OOOO PPPPP

correct exit from German market was the same day as Dow Jones exit, namely April 27, 2010.

A marginal higher top was made on august 5 after weeks of sideways grind, increasing opportunity costs.

So the correct top was April 27, but let's play along with the experts who are still LONG and using all this glowing eco data as proof of the continuing bullmarket ....

CALL: a daily close < 5,900 = Adios amigo!! = TOP that will hold for 5 years+ = german economy crashes bigtime

sub-call: Trichet, his wife and mistress will get forked by the knight = knight checks the King, Queen and Rook!!!