German growth picks up speed

German gross domestic product grew by 0.6% in the three months to September, driven by strong overseas demand for German goods and increased investment by businesses at home, the federal statistics office said.

That was faster than the 0.2% growth recorded in the second quarter and also better than analysts' expectations of 0.4% growth.

"The German economy, long derided as the sick man of Europe, is showing clear signs of renewed vigor," said Bank of America economist Holger Schmieding.

Indeed, the latest figures mean that the German economy has already met the government's 0.8% growth target for the entire year with three months yet to be accounted for.

Government officials said that they were especially encouraged by signs that businesses are beginning to invest their profits in new equipment and facilities.

"That is boosting expectations regarding the creation of new jobs," the Economy Ministry said in a statement.

"As the economy continues to recover, the positive effects of the labor market reforms will lead to an improvement in the situation on the labor market during the course of next year," it added, referring to measures to loosen strict rules on hiring and firing.

Source:
Germany Info, German Embassy Washington, D.C.
http://www.germany-info.org/relaunch/info/missions/embassy/embassy.html