Consumer Spending GDP and Economic Growth

Consumer Spending GDP and Economic Growth

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Consumer Spending GDP and Economic Growth in Germany

The article on “Consumer Spending Drives Germany’s Economic Growth” on January 14th, 2016, depicts how well the German economy is sailing in the current economic storms (Wagstyl, 2016). According to Wagstyl (2016), Germany has recorded a budget surplus of 0.5% in the year 2015 which was apparently deemed as the highest in the last fifteen years. In addition, her economy has improved to 1.7% in growth as a result of exemplary consumer spending habits. Moreover, the country has been experiencing low unemployment, a consistent rise in wages and an astounding low inflation rate. As a result of these economic performances, her Gross Domestic Product (GDP) has risen to 1.9 rising by 1% from 2013 (Making economic growth more socially inclusive, 2014).

It is thus through her consumer spending that the country is continuing to experience exemplary economic stability year after year. Spending has been propelled by the low energy costs in the country as well as appreciably low-interest rates on savings (Wagstyl, 2016). Therefore, domestic consumption has led to the budget surplus and therefore the country has been able to handle extra costs that were brought about by high refugee influx in the country. For the year 2016, the government has speculated that it will realize a GDP growth of about 1.8% depicting a more balanced budget over time irrespective of the social and political pressures brought about by a large number of refugees she is handling (Making economic growth more socially inclusive, 2014).

Currently, economists have outlined that the current quarter has realized 0.4% growth in the economy in comparison to the previous one. The high public spending behavior has thus contributed to a tremendous increase in the 2016 budget boosting the economy to a great deal. It has therefore been seen that her unemployment rate has improved greatly from the stipulated 4.2% making her one of the leading countries in employment and economic stability due to outstanding job creation policies (Making economic growth more socially inclusive, 2014). The economic growth has enabled the country to handle a huge number of refugees without draining her budget and in fact leaving an indication of the highest surplus ever to be realized in the last fifteen years. Therefore, this time, consumer spending, low unemployment, low inflation rates and most of all the rise in consumer spending has seen to it that economic growth has improved, GDP has risen and budget surplus has been realized (Wagstyl, 2016).


Making economic growth more socially inclusive. (2014). OECD Economic Surveys: Germany 2014. doi:10.1787/eco_surveys-deu-2014-7-en

Wagstyl, S. (2016). Consumer spending drives Germany’s economic growth. The Financial Times Limited 2016, 1. Retrieved from