The German economy grew last year by 3.6%, its fastest pace since reunification. According to preliminary data, a rebound in exports and strengthening domestic demand were the cause.
This strong rate of growth comes on the heels of a sharp contraction experienced in 2009, when economic output fell by 4.7%, its worst showing since World War II.
Germany's recovery is a bright spot in an otherwise struggling Euro zone, with Portugal and Greece the subject of daily consternation.
"Germany posted strong growth for 2010, but that was only after a strong decline in 2009," says Jacob Funk Kirkegaard, (left), a research fellow for Peter G. Peterson Institute for International Economics, a Washington, D.C.-based think tank. "It won't post that type of growth in 2011, more in the area of 2.5%."
Kirkegaard notes that Germany's economy is cyclical and trade dependent. The decline in GDP they experienced in 2009 was almost twice that of the United States, and this latest boom might in fact be a reversion to the mean.
He adds that being so export dependent, and with the growth in emerging markets with which Germany trades, the news is not all that surprising.
