TradingFloor.com, the home of Saxo Bank’s trading commentary, financial research and analysis, has released the video ‘Why the German economy continues to outperform in Eurozone’.
Despite a minor correction in industrial orders in December, the German economy continues to stand out from the rest of the Eurozone members in terms of growth. In the video Mads Koefoed, macro strategist at Saxo Bank’s Tradingfloor.com, discusses the performance of Europe’s largest economy versus the 16 other Eurozone members.
Mads Koefoed discusses two main reasons why he believes the Germany economy is continuing to outperform other countries in the Eurozone. Germany is turning part of its foreign exports away from other countries in the Eurozone and towards Asia. While Germany still continues to do a lot of trade within the Eurozone, by turning to Asia, where more solid growth is taking place, it is doing better than other Eurozone countries that have not moved some of their trade overseas.
Southern countries such as Spain, Portugal and Italy have also seen higher cuts on public spending than have happened in Germany, meaning Germany should recover much stronger.
Mads is optimistic that the economic growth of Germany will continue throughout 2011 and hopefully into 2012, because while Germany is cutting costs, it is not doing it as harshly as other countries.
Northern areas of the Eurozone such as the Netherlands and France are expected to catch up with Germany first, though it looks doubtful whether the southern countries will make real advance any time soon. Mads mentions that other countries outside of the Eurozone, such as the UK, should catch up fairly quickly as well. While the UK may see a weak first half due to the rise in VAT and the public spending cuts, the second half of 2011 should see a strong rebound.
The Eurozone economy video is available to view on the Saxo Bank TradingFloor website.