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Germany: stronger economy raises Merkel vote hopes

Tuesday, May 09, 2017 - 01:46

From online shopping firms to banks and autos, profits are up at German firms. As David Pollards reports, the results come as industrial output points to solid growth, giving a boost to Chancellor Angela Merkel as she bids for a fourth term in September's federal election.

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With five months to go to a federal election, it's what Germany's ruling Conservatives wanted. The weekend's local election victory boosting Angela Merkel's hopes for a fourth term as Chancellor -- just when the economy is blooming. New data shows industrial output up 1.4 per cent on the quarter, orders up for a second month in a row, exports at a record high. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "It's fair to say that the economy is benefiting from a recovery in global growth. Certainly that's one thing which helped the German economy. You're starting to see a little bit more of a boost coming through from the consumer side as well." And for corporates too, there's a fair wind... The day's results show Commerzbank beating forecasts with a 28 per cent rise in Q1 profit - in part thanks to one-off factors. Continental raised its outlook for tyre and car parts sales - it expects business to remain strong. And job vacancies in Germany have hit an all-time high as Europe's biggest economy expands faster than its workforce. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "I think across the whole of corporate Germany is a sense that, you know, companies have had to tighten their belts. I think to a large extent workers have bought into that. And obviously that's starting to pay off, now that activity levels are picking up." This didn't pay off for Munich Re's results. Hurricane Debbie not only battered Australia in March - but the claims that resulted also hitting the German insurer's profits. While Germany's still massive trade surplus could also be a headwind - in relations with global trading partners. As Merkel heads towards a national vote, that's potentially on the list of problems she faces. Even if for now the domestic economy isn't.

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Germany: stronger economy raises Merkel vote hopes

Tuesday, May 09, 2017 - 01:46