German economy grows at a faster-than-expected rate


Sat, May 14, 2011 - Page 10

The German economy, Europe’s biggest, grew by 1.5 percent in the first quarter as investment and spending at home combined with already-buoyant exports, official figures showed yesterday.

The quarter-on-quarter rise was above economists’ forecasts and nearly four times the 0.4 percent growth recorded in the last three months of last year, when economic activity was impacted by a harsh winter. It was also higher than expected in the markets, where the consensus was that Germany’s GDP would grow by 1 percent.

The January-to-March figure was the strongest since a 2.1 percent spurt in last year’s second quarter, when the German economy was just emerging from a savage recession.

“Germany is the engine of growth among industrial countries — and not just in Europe,” German Economy Minister Philipp Roesler said.

The German economy has benefited over the past year from strong demand for machinery, cars and other goods from a recovering global economy — coupled with improving domestic demand.

Data released earlier this week showed that German exports and imports both rose in March to their highest monthly level since the country started keeping records in 1950.

However, “the balance of exports and imports had a smaller share in the strong GDP growth than domestic uses” this time around, the statistical office said.

It pointed to investment in equipment and construction, as well as consumer spending.

In year-on-year terms, the German economy grew by 5.2 percent — the strongest performance since reunification two decades ago.

Meanwhile, France’s national statistics office said economic growth had accelerated in the first quarter thanks to higher consumer spending and corporate investment.

The Insee statistics agency said in a statement yesterday that the French economy grew 1 percent in the first quarter, well above the 0.3 percent growth recorded in the final quarter of last year and faster than the 0.6 percent that Insee forecast in March.

Insee said imports outpaced exports in the first quarter.