German growth is getting a boost from spending on migrants - while German business morale rose in November to the highest level since summer 2014, shrugging off an economic slowdown in China, the Volkswagen emissions scandal and the Islamist attacks in Paris. David Pollard reports.
They may be one of Europe's biggest challenges - but for Germany, they're also a bonus to growth. Spending on refugees boosting state spending to the most it's seen in nearly seven years. Buoyant private consumption also helping offset weaker foreign trade - and worries over the attacks in Paris. Overall, GDP rose 0.3 per cent on the quarter. That is slightly down on the previous three months. Some surprise then that business sentiment is at its healthiest in over a year. According to the IFO institute's Klaus Wohlrabe. (SOUNDBITE) (German) IFO EXPERT, KLAUS WOHLRABE, SAYING: ''This uncertainty in the market doesn't seem to affect the German economy. There is still appetite for investments as numbers and consumer figures have been good for months." German exports to the US and Britain surged this year - helping take up the slack with China. Even VW's emissions scandal appears to be shrugged off for now. It could be different next year: the growing cost of migrants leading, possibly, to heavier taxes and higher government borrowing. Bill Blain is Capital Markets Strategist at Mint Partners. SOUNDBITE (English) BILL BLAIN, CAPITAL MARKETS STRATEGIST, MINT PARTNERS, SAYING: "It's a great thing to stand there and say 'we are welcoming, we are a society that needs to bring new people on board', but as soon as we see the kind of atrocity we saw last week, that then reawakes everyone's belief that this is a bad thing, and you're going to see politicians suffer from that." Political crisis, perhaps, waiting in the wings as German and French elections prepare for centre stage in 2017.