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Aline Schuiling, senior economist at ABN AMRO, notes that the latest data showed that German economy expanded by 1.5% in 2018, down from 2.2% in 2017.
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“In line with what had already been suggested by trade data and the quarterly growth numbers for 2018Q1-Q3, the weakening of growth was concentrated in net exports, which had contributed 0.3 percentage points to total GDP growth in 2017, but reduced it by 0.2pp in 2018.”
“The annual growth number allows us to make a first estimate of Q4 GDP growth, which we think expanded by around 0.3% qoq, after it contracted by 0.2% qoq in Q3. As such, any fears for two consecutive quarters of contraction (i.e. a technical recession) have proved to be unwarranted.”
“Looking ahead, we expect annual growth to moderate further in 2019, largely because we expect a weak start to the year. Still, in the course of 2019, we expect global policymakers to facilitate a modest recovery in world trade growth, which should support a pick-up in Germany’s exports. Moreover, domestic demand should continue to grow robustly.”