FS Stapleton Alliance - German Economic Growth Better Than Expected in Q4

FS Stapleton Alliance reports German investor sentiment rises in anticipation of economy reopening.

Hong Kong, Hong Kong S.A.R., March 09, 2021 --(PR.com)-- German GDP growth was better than expected in the final quarter of last year, boosted by robust exports and good construction activity. Recent data, published by the Federal Statistics Office, showed that the economy had grown by 0.3%. This was better than the initial estimate of 0.1% growth for the eurozone’s largest economy.

The data also showed that the German economy had shrunk by 5.3% in 2020. Analysts at FS Stapleton Alliance say this contraction, which was much smaller than in many of Germany’s eurozone peers, was minimized thanks to the government’s strong financial response to the pandemic last year.

FS Stapleton Alliance analysts are confident that Germany’s economy will be on track to make a strong recovery during the course of this year but cautioned that there are still challenges to overcome.

In November, the German government imposed the second lockdown. This saw the closure of restaurants, bars and hotels and was later expanded to include the closure of most shops and services. The harsher restrictions were extended till the 7th March, with German Chancellor Angela Merkel reluctant to reopen schools and businesses until the rate of infection was properly under control.

On Monday, the government signaled that it intended to gradually lift restrictions in the coming weeks. FS Stapleton Alliance analysts believe the reopening of the economy, combined with the rollout of the vaccine will bode well for Germany’s economic outlook.

Although the economy is expected to contract by 1.5% in the first quarter of this year, German investor confidence remains surprisingly high.

In February, German investor confidence rose significantly on expectations that consumption would increase in the coming months as the economy reopens.

The ZEW economic institute revealed that in February, German investors’ economic sentiments had risen by almost 10 points from the month before.
FS Stapleton Alliance
Kyle Yuen