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Germany Witnesses Economic Boom due to Refugees Inflow | ASHARQ AL-AWSAT English Archive 2005 -2017
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Syrian refugee Reem Habashieh stands in front of a Christmas traditional wooden pyramid at the Christmas market in Zwickau, eastern Germany on Tuesday, Dec. 8, 2015. (AP Photo/Jens Meyer)

London – German economy has been positively affected by the arrival of 1.1 million refugees to the country in 2015 and 2016.

GDP has reached 1.9 percent in 2016, compared to an average of 1.4 percent in the previous years, according to recent figures issued by Germany’s Federal Statistics Office.

Economic growth was mainly due to two factors: increase in governmental spending and consumption hike.

In 2016, the German government spent around 20 billion Euros ($21.3 million) to accommodate refugees and provide them with daily necessities. As a result, public expenditure increased by 4.2 percent, the highest record since 1992, the year that witnessed the country’s reunification.

On the other hand, consumption increased by 2.5 percent, mainly boosted by a hike in household spending.

On the investment level, the accommodation of hundreds of thousands of refugees – also had a positive effect on Germany’s economic situation.

Refugees’ accommodation has refreshed the construction sector, as the house-building sector grew by 4.3 percent.

According to the Berlin Economic Institute, the greatest impact of refugees’ inflow on economic expansion would be seen in 2017 and the following years, as around 500,000 new job opportunities would be created on the short term in the fields of health, education, training, trade and food.

In the same context, the European country has seen a burgeoning sector of small-size enterprises. Companies, which have been newly established by immigrants holding foreign passports, grew by 44 percent in 2015, compared to slow growth of 13 percent in 2003.

British-based The Economist said that about one-fifth of those engaged in entrepreneurial activity were born abroad.

The number of self-employed people with a Middle Eastern background rose by almost two-thirds between 2005 and 2014, according to The Economist, quoting two researchers at the University of Mannheim.

“There has been a marked increase in founding activity by people from Syria, Iraq and Afghanistan,” says Maik Leonhardt of IHK Berlin, an association of small and medium enterprises, as quoted by the British weekly magazine.