German economic locomotive helped by Egypt trade

Daily Star Egypt Staff
2 Min Read

Economic relations with Egypt have profited the German economy with benefits to both countries in their push for increased trade, Dominik Mutter, head of the German embassy’s economic section said Thursday.

“Of course, we would like to have growth rates like Egypt , Mutter said, referring to the 6% at which the Egyptian economy is expected to grow this year, “but for a large economy such as Germany’s, this is very difficult to achieve. After all, Germany is the world’s third largest economy, still larger than even China.

German direct investment in Egypt tripled during the fiscal year 2005/06, and Egyptian exports to Germany have surged: During the first nine months of 2006, Egypt exported to Germany almost 25% more goods than it had during the same period in 2005.

“This is also interesting , notes the German diplomat, “as German exports in general have risen only about 18% during the first nine months. It means that Egypt has been able to increase its exports to Germany a lot more than other countries have.

Germany, traditionally the economic powerhouse of Europe, is showing signs of a robust growth and is regaining its role as the continent’s economic locomotive. It is expected that in 2006, the German economy will grow by up to 2.5%. This growth is driven both by strong exports (up by 12% for this year), and by increasing domestic demand. The latter had long been a weak side of the German economy, and that it picks up now is a sign of both increased confidence in the economy and increased purchasing power.

Germany’s economy is also growing because of the productivity gains which German companies have achieved lately: over the past year, German companies’ gains in productivity have grown considerably faster than in other European economies.

“This is one of the most important and encouraging figures to come out recently , says Mutter, “as it shows that German companies have become much more competitive.

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