New normal

Stop Helping Us, Please

Siemens-Generatoren
Germany's economy is spinning along nicely with help from the ECB. Source: Martin Schutt/dpa

Germany’s economists agree: Whoever wins the country’s federal election later this month can bank on decent growth numbers for the next few years. Europe’s largest economy is seen growing at an annual pace of around 2 percent this year, and probably in 2018 and 2019, too.

That was the consensus of the country’s four leading economic institutes, who released updated forecasts this week. Considering that Germany is near full employment, rather than on a rebound out of a crisis, the growth numbers are even more impressive.

Economists know who they have to thank, at least in part. “The monetary policy of the ECB is giving the German economy a clear push,” said Roland Döhrn of the RWI economics institute. A rebound in global trade is helping the country’s export-heavy economy too, even if it may be at the cost of others. Germany is set to post the world’s largest trade surplus for the second year running, according to the Munich-based Ifo Institute, although the surplus is seen falling slightly as a percentage of Germany’s economic output (from 8.3 percent in 2016 to 7.9 percent in 2017).

But it’s not just Germany that’s benefiting. The 19-nation euro zone is expected to grow at 2.2 percent this year, according to the European Central Bank’s latest forecasts, which would mark the highest pace since 2007. Political threats to Europe’s economic health (think French elections) have also dissipated in the past few months.

In short, things are humming along just fine. Which is why German policymakers, once again, were frustrated with European Central Bank President Mario Draghi’s press conference on Thursday.

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