German economy grows by 0.4 pc in first quarter

23rd May 2006, Comments 0 comments

23 May 2006, BERLIN - Strong exports but also rising domestic demand helped Germany's economy grow by 0.4 percent in the first quarter of 2006 compared with final quarter of last year, the Federal Statistics Office said Tuesday in a statement.

23 May 2006

BERLIN - Strong exports but also rising domestic demand helped Germany's economy grow by 0.4 percent in the first quarter of 2006 compared with final quarter of last year, the Federal Statistics Office said Tuesday in a statement.

Domestic demand - which has been weak in Germany for years - grew by 0.6 percent in the first quarter, said the statement.

Ralph Solveen, a senior economist at Commerzbank in Frankfurt, said that while this growth was "a surprise" it merely represented a "correction" after the sharp fall in domestic demand in the final quarter of 2005.

Strong exports remained the pillar of German growth and fuelled 75 percent of the first quarter's economic expansion, said the statement which confirmed provisional figures released earlier this month.

Compared with the same quarter in 2005, German GDP growth was 1.4 percent after being adjusted for the greater number of working days due to the late Easter holiday, the statement said.

This, however, was below the 1.7-percent growth chalked up in the final quarter of last year compared with same period in 2004, the report underlined.

Germany's economy is expected to grow by between 1.5 percent and 2 percent this year.

DPA

Subject: German news

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