Germany releases its forecast for economic growth in the country

yousef28 January 2022Last Update : 2 years ago
Germany releases its forecast for economic growth in the country

The German Economy Ministry said on Friday that economic growth in the country is likely to reach pre-crisis levels during the second quarter of this year.

The German ministry indicated that the German economy is expected to grow by 2.3% next year.

Germany is suffering from an unprecedented outbreak of the emerging Corona virus, which in turn will negatively affect the German economy, as German Chancellor Angela Merkel had said earlier that the recent increase in Corona virus infections is the worst that Germany has witnessed so far.

She called for tightening precautionary restrictions to limit the spread of the disease. Merkel said the situation was very dire and warned that hospitals would not be able to hold the numbers unless the fourth wave of the virus was broken.

Data released today, Friday, showed that the revised reading on consumer confidence issued by the University of Michigan scored 67.2 points, during this January, against market expectations of 68.8 points. It is lower than the previous reading, which recorded about 68.8 points.

While the revised readings index of inflation expectations issued by the University of Michigan during the same period recorded 4.9%, to coincide with the previous reading of the index last December.

It measures the level of the composite index based on the survey conducted on consumers. Where the University of Michigan surveys 500 families a month regarding their financial situation and aspirations about the economy in the short and long term.

It is worth noting that consumer confidence is directly related to an increase in consumer spending. It is worth noting that this survey is designed to include all American families except for those who live in Alaska and Hawaii, and a minimum of 500 interviews are conducted over the phone.

The data of the US Census Bureau released a while ago on the core personal consumption expenditures price index during the month of December showed a growth of 0.5% in the index, which matches market expectations, which indicated a growth of 0.5% in the index, and in line with the previous reading of the index, which recorded an increase of 0.5% during last November.

It should be noted that this indicator measures the change in the prices of goods and services purchased by consumers, excluding food and energy, and a reading higher than expected reflects positively on currency movements and vice versa.

This indicator differs from the consumer price index, in that it only measures the goods and services targeted and consumed by individuals. Prices are measured according to the total spending of each item which gives insight into the behavior of consumer spending. Thus, some consider this indicator to be the preferred inflation measure of the US Federal Reserve.

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