What has been called the “German miracle,” which is the ability for the European Union’s largest economy to grow in the face of the region’s recession, got some support today. The January 2013 Ifo Business Survey showed another bump up.
Just yesterday, as a sign of the struggle of other EU nations, Spain revealed that its unemployment rate rose above 26%. And Markit data showed the economic activity in France, the area’s second largest economy by gross domestic product, had slowed.
The Ifo Business Climate Index for German industry and trade rose for the third time in succession. Assessments of the current business situation were somewhat more positive after deteriorating last month. Future business perspectives improved considerably. The German economy made a promising start to the New Year.
Whether the German economy can maintain this pace probably depends more on its trade relationships with large nations outside the European Union — like the United States and China — than on those countries within Europe.
Douglas A. McIntyre