german economy M GERMAN ECONOMY

The German economy is one of the strongest economies worldwide. With a huge export surplus and a strong domestic market it is set to grow even further. International and national economists predicted an economic growth of roughly 1.8 % for 2014 and an additional growth of about 2+ % for 2015. But what makes the German economy so strong?

 

When people think of Germany they usually think of German car brands like Mercedes-Benz or Audi. However, Germany's economy is about more than just cars. Airbus for example is a leading company with an operating base in Hamburg, Germany. Other German companies are heavily present all around the world. You will find Heidelberg Cement in Romania just as you find Siemens in the United States. German retailers are expanding, too. Just think of Hugo Boss, to name only one.

 

One of the main reasons why these expansions of German business could happen in the past was and still is the notion of Made In Germany. Customers from all around the world trust German quality, safety and engineering. Thus they trust German products. Therefore it is not astonishing to see how the demand for German products rises especially in such countries with an expanding middle and upper class hungry for luxury and high quality products.

 

Of course it is not only the high expectation of German products that lets the economy thrive, but also the good German infrastructure. However, it was the infrastructure that slowed economic growth during the last years. Analysts often pointed out that the economy could have been much stronger, had the infrastructure better supported it. Yet Germany is nevertheless a great investment, for the economy is still expected to grow at a stable pace while the government has announced to renew the infrastructure (especially highways) shortly before the next election of the Merkel administration.

 

So is Germany also a good long term investment? Yes, it is! With a huge trading surplus, growing markets for German products in Asia and the U.S., a strong domestic demand and an administration that firmly supports the nation's industry a steadily and reliably growing economy is to be expected. And even though German shareholders had to face some minor setbacks, the German stock index (DAX) is now heading for a new all time high at 10,000 having left the old all time high of 9,000 well behind.

 

What factors are important when investing in Germany? We guide you along the way!