The last month of the year turned out to be positive for the German economy. The unemployment rate dropped unexpectedly, boosting the market’s confidence. The stabilizing manufacturing industry became the main reason for this improvement. According to the existing data, the number of unemployed has decreased by 16 thousand in contrast to estimates for an increase of 6 thousand. Analysts emphasize that for a long time the unemployment rate has been holding at its lowest level of 5%. Reduction in the number of jobless is a good sign for Germany’s economy. Statistical data for December shows a sharp increase in factory orders and a moderate rise in business activity which helps maintain the balance of the state budget. Earlier, the IMF and the ECB urged Germany to reduce its budget surplus in order to invest more in public expenditures. Today, experts believe that this is no longer a priority.According to employment agencies, the demand for the new labour force has significantly declined. Earlier this year, the leading manufacturers, including the auto giant Volkswagen AG and the corporation Siemens AG, announced more than 80 thousand job cuts. However, some difficulties may arise here for the economic situation, experts warn. In particular, job losses may lead to a reduction in private spending that actually supports the German economy. Economists stress that it was high consumer demand that helped prevent a recession this year.
