German Economy Remains in Overdrive

08 January 2007

NUREMBERG: Germany's economic growth received a further boost this week from an ongoing fall in jobless numbers; plus a survey listing the nation as the most competitive of the thirteen euro-currency economies.

Unemployment, Germany's most punitive economic deadweight over the last ten years, fell by a seasonally adjusted 108,000 in December to 4.12 million or 9.8% of the national workforce, reported the Federal Labor Office last week - the ninth consecutive month of decline.

Buoyancy during the holiday shopping period also contributed to the bullish December numbers - even though higher sales were partly attributed to advance purchases to avoid the three-point hike in VAT (sales tax) to 19% effective as of January 1.

The upbeat mood was further sustained in a survey of 1,175 top European executives published by business daily Handelsblatt. According to the poll, Germany is now regarded as the most competitive economy in the 13-nation eurozone

On a scale of 1 (very good) to 5 (very bad), the survey awarded Germany an average grade of 2.5, up from 2.8, and behind only China (1.8) and Switzerland (2.4).

The newspaper attributes Germany's perceived new competitiveness to the economic reforms pursued by new chancellor Angela Merkel, who took office early in 2006.

Data sourced from DW-World (Germany); additional content by WARC staff