Germany has emerged from two challenging years of near-stagnant growth with a brighter economic outlook. While consumer spending has fueled a resurgence, it masks persistent weaknesses in the industrial sector that defy quick fixes.
Recent data suggests that Europe's largest economy is gaining momentum, particularly in service industries like tourism and hospitality. Business sentiment is improving as confidence grows that a feared winter recession has been averted.
Although manufacturing remains sluggish, the signs of recovery are welcomed across the euro zone, where Germany once led expansion but faltered due to rising energy costs and weakened demand from China.
Political dynamics may also shift as rising wages, easing inflation, and anticipated interest rate cuts improve prospects, potentially reducing support for far-right parties like the AfD.
"While consumers are more confident and spending more," explains HSBC economist Anja Heimann, "the ove ...
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