Germany posted a record budget surplus last year helped by rising tax revenues and employment and low debt costs. As David Pollard reports, new numbers also show growth quadrupling to 0.4 per cent in Q4.
There's little rest at the checkouts - Germans apparently sucking up goods as fast they can. The consumer the darling of an economy where growth quadrupled in the fourth quarter to 0.4 per cent. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "They've had some pretty buoyant construction investments. They've also had higher government spending. Annualised GDP of around 1.7 percent - it very much remains the powerhouse of the European economy." So with business confidence on a high this month, there was surprise at the latest consumer confidence survey. That slipping as it heads into March - on domestic and foreign worries. (SOUNDBITE) (German) GFK RESEARCHER, ROLF BUERKL, SAYING: "Uncertainty over the new U.S. president is certainly one reason ... And German inflation was at 1.9 percent in January. That means a reduction in purchasing power." But the bumper buying has also been matched by a bumper surplus for the government. New figures show Germany's coffers overflowing by a record 23.7 billion euros in 2016. Numbers that could prompt other EU states to demand more state spending. Angela Merkel was keen to play down the 7.7 billion euro Federal portion of the surplus when she spoke in Berlin. Even if she admitted there'll be little problem in spending it. (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "I am not worried that we won't know what to do with the money that might exist." With export growth dropping below imports in the last quarter, one way to spend it could be to boost domestic demand. The consumer - a minister told Reuters - likely to benefit as the government cuts taxes and hikes investment - in this, an election year.