German GDP Growth Confirmed at 0.7% in Q1


The German economy grew a seasonally-adjusted 0.7 percent in the first quarter of 2016, accelerating from a 0.3 percent expansion in the preceding quarter and matching preliminary estimates. It is the strongest expansion since the first quarter of 2016, driven by household spending and a faster increase in investment while foreign trade had a downward effect on growth.

Quarter-on-quarter, private consumption rose 0.4 percent, the same pace as in the December quarter 2015. Public consumption advanced by 0.5 percent, slowing from a 0.9 percent growth in the previous three months. Overall consumption contributed 0.3 percentage points to growth. Gross fixed capital formation expanded by 1.8 percent, up from a 1.4  percent increase in the previous quarter. Investment in construction grew the most by 2.3 percent (after contracting 2.0 percent in the fourth quarter), followed by machinery and equipment investment (+1.9 percent from +1.0 percent) and investment in other products (+0.2 percent from +0.7 percent). Exports increased by 1.0 percent, reversing from a 0.6 percent contraction in the December quarter. Imports rose 1.4 percent, as compared to a 0.5 percent rise in the previous three months. That brought a downward effect of the GDP (-0.1 percentage points). Inventories were up, adding 0.1 percentage points to growth.

Year-on-year, the GDP expanded by 1.3 percent, slowing from a 2.1 percent expansion in the previous quarter.  It is the weakest growth since the March quarter 2015. Household final consumption rose by 18 percent, down slightly from a 1.9 percent growth in the previous quarter. Government consumption expanded by 2.7 percent, slowing from a 3.0 percent growth in the December quarter. Gross fixed capital formation also grew 2.1 percent (after a 4.1 percent expansion in the preceding quarter). Machinery and equipment investment grew the most by 2.4 percent, followed by other products (+2.2 percent) and construction (+1.9 percent). Overall investment added 0.4 percent to growth. In contrast, the reduction in inventories slowed down the GDP growth by 0.1 percentage points. The balance of exports and imports slashed 0.5 percentage points to the year-on-year GDP growth. 

German GDP Growth Confirmed at 0.7% in Q1


Destatis l Rida Husna | rida@tradingeconomics.com
5/24/2016 7:37:55 AM