German Economy Expands 0.3% in Q1


The German economy grew a seasonally-adjusted 0.3 percent in the first quarter of 2015, markedly slowing from a 0.7 percent expansion in the October to December period and matching preliminary estimates. The expansion was mainly driven by an increase in public consumption and investment while foreign trade brought a downward effect to the GDP.

Quarter-on-quarter, private consumption grew by 0.6 percent, as compared to a 0.7 percent growth in the December quarter. Public consumption rose 0.7 percent. accelerating from a 0.3 percent growth in the preceding quarter. Overall consumption contributed 0.5 percentage points to growth. Gross fixed capital formation expanded by 1.5 percent, accelerating from a 0.8 percent in the last quarter of 2014 with investment in construction growing the fastest (+1.7 percent), followed by machinery and equipment (+1.5 percent) and other products (+0.7 percent). Exports grew by 0.8 percent, slowing from a 1.0 percent in the previous quarter while imports expanded by 1.5 percent, as compared to a 1.9 percent growth in the December quarter. That brought a downward effect of -0.2 percentage poin to the GDP. Inventories were slightly reduced, which had a negative impact on growth (–0.3 percentage points). 

Year-on-year, the GDP expanded by 1.1 percent following a 1.6 percent expansion in the previous quarter. Household final consumption  and government consumption increased by 2.4 percent respectively. Gross fixed capital formation in machinery and equipment rose a price-adjusted 1.5 percent and investment in construction declined by 1.9 percent, mainly due to a decrease in the construction of public other buildings and structures and of total dwellings. Overall investment substracted 0.7 percent to growth. While the reduction of inventories slowed down GDP growth by 0.6 percentage points,  the balance of exports and imports did not provide any contribution to the year-on-year GDP growth. In price-adjusted terms, exports of goods and services increased 4.3 percent from a year earlier and  imports rose 5.0 percent.

German Economy Expands 0.3% in Q1


Destatis l Rida Husna l rida@tradingeconomics.com
5/22/2015 8:04:24 AM