“They think it’s all over” is a well known quotation from Kenneth Wolstenholme’s BBC TV commentary in the closing moments of the 1966 FIFA World Cup Final, where England beat West Germany 4–2 after extra time. But it’s not all over for the German economy. Some interesting facts from The Economist on the economy as compared with its G7 colleagues.
* Highest growth of GDP/Capita among the G7 countries
* 6.6% unemployment – second-lowest
* Smallest budget deficit and least government debt relative to GDP
* Current account surplus which is 5% of GDP
* Household debt 99% of disposable income. UK – 170% USA – 128%
Although there are major budgetary issues in EU countries this has impacted on the value of the euro. With a falling euro this makes euro country exports more competitive and Germany has definitely benefitted from this. However, to rely on exports as the engine room of your economy is risky as recessions overseas can quickly revoke any growth. Last year domestic demand did increase and unemployment was the lowest rate for nearly 20 years. This could could put pressure on wages which may mean greater domestic spending.