In addition to all of these factors, the increased credibility of central banks is also believed to have contributed to low inflation. Over the years, central banks around the world have been resolute in their pursuit of price stability, while working hard to enhance their capabilities in the conduct of monetary policy.
As potential growth in Germany is only about 1½% this means that there was an increase in capacity utilisation for the first time since many years ago. However, the recovery in Germany is not broadly based. Domestic demand has not yet taken off. Growth has been driven mainly by exports.