Headwinds will buffet Germany

Germany has sailed ahead of everyone else in the eurozone since the recession - achieving an annualised GDP growth rate of 6%. Impressive stuff. But that tailwind looks likely to become a headwind before too long.

For years Germany lagged the rest of the eurozone, says Wirtschaftswoche. "Now we're leading it." Analysts reckon that German GDP grew by up to 1.5% in the second quarter alone. That's an annualised rate of 6% twice the figure expected for America this year.

The rebound is being driven by exports, which account for a comparatively hefty 40% of GDP. They jumped by 9.2% month-on-month in May, an annual rate of 22.9%, the strongest growth since the early 1990s. IHS Global Insight expects exports to climb by 10% this year, compared to 6%-7% in other major European economies. Germany's high-end capital goods are especially sought-after in booming emerging economies. There, Germany has a stronger presence than its European rivals, notes Holger Schmieding of Bank of America Merrill Lynch.

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