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Germany: Economic growth moderates in Q1 on subdued exports and declining inventories

May 22, 2015

In Q1 2015, GDP rose a seasonally-adjusted 0.3% over the previous quarter, according to more complete data published by the Federal Statistics Office (Destatis) on 22 May. The expansion followed Q4’s strong 0.7% increase and matched the preliminary estimate as well as met market expectations. Compared to the same quarter of the previous year, GDP increased 1.1% in Q1, which came in below the 1.6% expansion registered in the previous quarter.

The moderation was mainly driven by a decline in inventories. Private consumption recorded a 0.6% expansion over the previous quarter, which was only marginally below Q4’s 0.7%. Government consumption accelerated, picking up from Q4’s 0.3% increase to a stronger 0.7% growth in Q1. Gross fixed investment sped up from Q4’s 0.8% expansion to a 1.5% increase in Q1, the largest gain in a year.

On the external front, exports of goods and services increased 0.8% in Q1, which fell short of Q4’s 1.0% rise. Imports growth slowed from a 1.9% increase in Q4 to a 1.5% expansion in Q1. Consequently, the external sector’s net contribution to overall economic growth advanced marginally from Q4’s minus 0.3% to minus 0.2% in the first quarter.

The Bundesbank expects economic activity to increase 1.0% in 2015. For 2016, the Bank sees economic growth picking up to 1.6%. FocusEconomics Consensus Forecast panelists expect economic activity to expand 1.9% in 2015, which is unchanged from last month’s forecast. For 2016, the panel also forecasts GDP growth of 1.9%.


Author: Teresa Kersting, Economist

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Germany GDP Q1 2015 3

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Federal Statistics Office (Destatis) and FocusEconomics Consensus Forecast


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