Germany: GDP growth bounces back in first quarter
May 24, 2012
In the first quarter, GDP expanded a seasonally and working-day adjusted 0.5% over the previous quarter, which contrasted the 0.2% drop observed in the fourth quarter and overshot market expectations that predicted a 0.1% expansion. Compared to the same period last year, GDP grew 1.7% in Q1 2012, slightly faster than the 1.5% expansion observed in Q4 2011. The stronger-than-expected outturn reflected an improvement in the external sector, while domestic demand remained subdued. Private consumption swung from a 0.2% contraction in Q4 to a 0.4% expansion in Q1, while government consumption increased only 0.2% (Q4 2011: +0.6% quarter-on-quarter). On the other hand, gross fixed investment contracted 1.1% in Q1, virtually offsetting the 1.1% gain tallied in the fourth quarter. Exports of goods and services grew 1.7% in the first quarter, which contrasted the 1.5% contraction seen in the fourth quarter. Growth in imports remained unchanged, which followed on the 0.8% drop recorded in Q4. Consequently, the external sector's net contribution to overall economic growth swung from minus 0.4 percentage points in the fourth quarter to plus 0.9 percentage points in the first. The government expects the economy to expand 0.7% this year, before accelerating to 1.3% in 2013. Meanwhile, the Bundesbank anticipates the economy to grow 0.6% this year and 1.8% in 2013.
Author: Ricardo Aceves, Senior Economist