Germany economy is becoming much more reliant on domestic conditions: Societe Generale

Quotes from Societe Generale Cross Asset Research:

-German GDP grew by a suprisingly strong 0.7% qoq in Q4 2014 (consensus 0.3%, SG 0.5%). As suggested by very strong retail sales in the quarter, we expect household spending to have been the key driver of growth, rising by 0.6%, following an equally strong 0.7% in Q3. We also expect investment to have risen, by 0.9% qoq, with a strong contribution from construction.

-Net exports should have left a neutral contribution, suggesting that the Germany economy is becoming much more reliant on domestic conditions. We expect this trend to continue this year, with private consumption remaining high on the back of the strong labour market, cheaper energy prices and robust growth in real disposable incomes. This in turn will be helpful for the rebalancing of the external imbalance and supportive for euro area growth.