While the German economy expanded by an impressive 0.8% in Q1, this failed to spur growth elsewhere in the euro-zone and the region's GDP rose by just 0.2%. Possible explanations for this are the fact that Germany's expansion was partly down to temporary effects, Germany imports relatively little from other euro-zone countries and their domestic demand remains very weak.
This implies that the German recovery cannot be relied upon to keep gaining pace and, even if it does, this will not guarantee strong growth elsewhere. There is every reason for the ECB to provide more policy support, ideally targeted at the economies and sectors that are struggling the most.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services