The export-oriented German economy is one of the hardest hit by the unprecedented de facto halt in global trade last year.
For months on end, the country weathered a double-dip recession, along with rising unemployment and sluggish international orders. Nevertheless, now that the world is seemingly running at full speed, Europe’s biggest economy records impressive gains.
In the latest forecast from analysts, Germany should revert to the pre-pandemic growth level by the second half of the year. This has a big probability of becoming a reality. The country ramps up in vaccination, with its major business centers now out of arduous lockdowns.
Similarly, the increasing rate of international orders for German exports provided timely support.
Household debt is also at a minimum compared to other developed nations that struggle to keep their heads above the water from debt.
Last month, the country’s purchasing managers’ index hit 64.4 points. This is the fifth consecutive recovery so far since the start of the year.
It is one of the highest results next to a record-high incurred in March at 66.6 and April’s 66.2. This is also significantly higher than the 64.0 expected analysts’ final consensus. For the record, any result above 50 points indicates expansion, while anything below suggests otherwise.
Analysts noted that the stellar figures are primarily due to the timely correction from last year’s slack.
On the other hand, some experts in the field noted that there is more into the picture than others fail to spot. Some noted that a consumer-driven manufacturing sector is now starting to regain footing.
Unemployment in Germany Stalls
Adding to the positive news, Germany’s unemployment in May stalls by 15,000 to 2.7 million. Such a result is better than the average consensus of a 9,000 fall, giving analysts a greater deal of contemplation on Germany’s forward trajectory.
Experts in the labor market believe that the recent fall emerged as more companies start to re-hire or hire new employees amid the bettering economic outlook.
During the month, Europe’s biggest economy slowly but surely reopened itself for business. This brings along hard-hit sectors into the line, particularly the services sector.
There is still a big room for improvement. However, spectators already welcome such a result with much gusto.
The country’s gross domestic product should expand by 3.5% in 2021.