- Joerg Zeuner, chief economist at KfW
The German economy, the Euro zone's pride, which is the only one in the currency bloc that has registered consistent growth since the financial crisis, grew by 1.7% last year, as robust domestic consumption and booming exports to the US helped to offset headwinds from Greece and other export markets. In 2014, the Euro zone's number one economy expanded 1.6%. Germany is benefitting from unprecedented stimulus by the European Central Bank. With the jobless rate at a record low, wages climbing and oil more than 37% cheaper compared to last year, domestic spending has become the key catalyst of economic growth. Private consumption increased 1.9% in 2015 from 0.9% last year, the most since 2000. Domestic demand contributed 1.5 percentage point to GDP. Exports surged 5.4%, while imports soared 5.7%.
The Bundesbank predicts the nation's economy to grow 1.8% this year and 1.7% in 2017. Some analysts predicted that the German economy would benefit from the influx of 800,000 refugees into the economy, as private demand is likely to jump. Moreover, the ECB expanded its QE programme in December to at least 1.5 trillion euros and cut one of its key interest rates further below zero, providing additional support to the Euro zone economy.
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