German Q1 GDP Growth Confirmed at 1-1/2-Year Low


The German economy expanded a seasonally-adjusted 0.3 percent on quarter in the three months to March of 2018, following a 0.6 percent growth in the previous period and matching the preliminary estimate. It was the weakest pace of expansion since the September quarter of 2016.

Still, it marked the 15th straight quarter of growth, making this Germany's longest upswing since 1991. Positive contribution to GDP mainly came from gross fixed capital formation (0.3 percentage points) and household consumption (0.2 percentage points). Meanwhile, government spending (-0.1 percentage points) and net exports (-0.1 percentage points) had a downward effect to GDP growth. In addition, changes in inventories substracted 0.1 percentage points from growth. 

Compared to the previous quarter, gross fixed capital formation expanded by 1.7 percent, after a 0.3 percent rise in Q4. Investment in construction grew the most (2.1 percent), followed by that in other products (1.5 percent) and that in machinery and equipment (1.2 percent). At the same time, household consumption increased by 0.4 percent, following  a 0.1 percent rise in Q4. On the other hand, government spending contracted by 0.5 percent, reversing from a 0.4 percent gain in the preceding quarter and marking the first drop in nearly five years. Exports of goods and services declined by 1 percent (vs 2.6 percent in the previous three-month period), and imports dropped by 1.1 percent (from 1.8 percent).

Year-on-year, the economy expanded a calendar-adjusted 2.3 percent, after a 2.9 percent growth in the prior period. It was the lowest growth rate since the June quarter 2017. On a non-seasonally adjusted basis the economy grew by 1.6 percent year-on-year, much slower than a 2.3 percent expansion in Q4, as government spending increased at a softer pace (1 percent from 1.6 percent). Also, gross fixed capital formation rose at a slower 2.7 percent (from 3.5 percent), as investment growth eased for all categories: machinery and equipment (4.4 percent from 6 percent); construction (1.3 percent from 1.7 percent) and other products (3.1 percent from 3.4 percent). Net external demand contributed much less to the GDP, as exports went up 3 percent while imports advanced at a faster 3.3 percent. Meanwhile, household consumption grew by 1.4 percent, faster than a 1.1 percent rise in the previous period.

German Q1 GDP Growth Confirmed at 1-1/2-Year Low


Destatis | Rida | rida@tradingeconomics.com
5/24/2018 3:36:35 PM