Germany: Growth in the German economy slows at a quicker pace than expected in the first quarter
Preliminary data released by the Federal Statistics Office (Destatis) on 15 May showed that the German economy lost considerable steam in the first quarter of this year. In the January–March period, the economy expanded a seasonally-, calendar- and price-adjusted 0.3% over the prior quarter, down from the fourth quarter’s 0.6% increase. While the slowdown had been suggested by available sequential data on the various sectors of the economy, the result came in below the softer moderation to 0.4% anticipated by market analysts. It nevertheless marked the 15th consecutive quarter in which the economy grew.
Domestic demand drove the result in the first quarter, as fixed investment rose substantially from the prior quarter due to robust investment in construction and equipment. Meanwhile, private consumption grew somewhat, but government expenditure decreased for the first time in almost five years, dragging on growth. On the external front, both exports and imports lost steam in the first quarter of the year.
A year-on-year comparison on a calendar-adjusted basis showed that economic growth slowed from 2.9% in the fourth quarter of last year to 2.3% in the first quarter. Destatis noted that the calendar impact in the first quarter was particularly strong due to the timing of public holidays.
A detailed breakdown will be available on 24 May.