German economy powers on

The German economy expanded at its fastest pace in five years in 2016 and the momentum is expected to continue this year as rising private and state spending help Germany cement its position as the locomotive of the eurozone.

Europe’s largest economy expanded by 1.9% last year, a preliminary estimate from the country’s Federal Statistics Office showed yesterday, as an environment of low interest rates and a record influx of refugees fuel household and state spending.

These factors have compensated for weakening exports, long the pillar of an economy where manufacturing makes up about a fourth of output.