Germany confirms first quarter growth of 0.2 percent

21st May 2010, Comments 0 comments

The German economy, Europe's biggest, expanded 0.2 percent in the first three months of the year, the national statistics office said, confirming an estimate released on May 12.

Germany is slowly emerging from its worst post-war recession and the seasonally-corrected data showed that economic activity maintained the same quarterly rate of growth as in the last three months of 2009.

The government has forecast full-year 2010 growth of 1.4 percent.

On an annual basis, German activity expanded by a calendar-adjusted 1.6 percent in the January-March period, the first year-on-year increase since the third quarter of 2008, the figures showed.

"Still looking good, even at second glance," ING senior economist Carsten Brzeski noted of the latest figures.

Quarterly growth was nonetheless held back by a negative trade contribution of 1.1 percentage points, the Destatis office said, since imports jumped 6.1 percent compared with an export gain of 2.6 percent.

A breakdown of the figures underscored chronically weak German domestic consumption, which fell a sharp 0.8 percent on the quarter following a more modest decline of 0.2 percent in the last three months of 2009.

Construction was also held back by bitter winter weather and only public consumption and inventory building allowed Germany to post a positive result overall.

For the rest of the year, the euro's fall against other major currencies should boost exports and indicators suggest growth could surge in the second quarter, before slipping back later.

"Today's GDP (gross domestic product) numbers are a good reminder that the German recovery is still shaky," Brzeski warned, largely because consumers have pulled back after splashing out on new cars last year with help from government subsidies.

© 2010 AFP

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