"This positive development provides a good foundation for private consumption continuing to play a key role in economic growth this year"
- Rolf Buerkl, GfK analyst
Will Germany be able to push the growth in the whole region and ease pressure on Mario Draghi, who is looking for alternative measures of stimulating growth? The German economy represents for more than one-third of the 18-nation bloc's GDP and the latest data suggests the economy is resilient even amid growing uncertainty surrounding European economy.
Earlier this week strong GDP data and German Ifo business climate provided a boost to the single currency, pushing it towards this year's high. On Wednesday Gfk market research company said its forward-looking measure of consumer sentiment advanced to 8.5 into March, climbing higher for an upwardly revised 8.3 a month earlier. It was the highest level since January 2007 and above the consensus forecast that stood for 8.2, bolstering the case domestic private and business consumption will drive growth this year. During the last year private consumption rose more than twice as strong as the overall economic output. The Gfk company predicts consumption will jump by 1.5% this year. Moreover, the whole economy is forecasted to expand 1.8% on the back of stronger exports and domestic demand.
Positive data from Germany can have a strong influence on the ECB, as policymaker will gather on March 6 to decide whether to stay pat on its policy or to make another market intervention.
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