German Economic
Growth Slows In First Quarter-The Total Investment &
Insurance Solutions
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15
May 2018
 |
Germany (The Total Investment & Insurance Solutions)
German economic growth slowed to 0.3 percent in the first quarter, its
weakest performance in more than a year, though analysts largely blame one-time
factors like bad weather and expect a rebound.
The quarter-on-quarter growth reported Tuesday by the Federal
Statistical Office compared with an expansion of 0.6 percent in the fourth
quarter of 2017 and 0.7 percent in the third. The Total Investment & Insurance Solutions
It was the slowest pace since the third quarter of 2016, when growth was
also 0.3 percent. Economists had predicted a slightly brisker 0.4 percent, but
concurred that the lackluster showing doesn't ring alarm bells.
The statistics office said that, while investment in construction and
equipment rose, government spending was lower and both exports and imports
decreased. That fits a recent pattern of German growth being supported above
all by domestic demand. The Total
Investment & Insurance Solutions
Despite the setback, it was the 15th consecutive quarter of growth,
making this Germany's longest upswing since 1991.
The first-quarter data were "probably distorted" by an early
Easter vacation, cold winter weather and now-ended strikes, said Carsten
Brzeski, an economist at ING-DiBa in Frankfurt. He said that there are
promising signs of a rebound over the coming months. The Total Investment & Insurance Solutions
"While uncertainties and downside risks remain — mainly stemming
from a possible escalation of the current trade tensions — there is, in our
view, little reason to doubt the underlying strength of the current recovery,"
Brzeski said in a research note. The
Total Investment & Insurance Solutions
Martin Wansleben, the chief executive of the Association of German
Chambers of Commerce and Industry, said that "the start to the year is a
disappointment, but not the beginning of the end of the upswing." He
pointed to "a series of special factors" that also included a major
flu outbreak.
The economy will be boosted by increased government spending on child
benefits and pensions in upcoming quarters, said Jennifer McKeown, chief
European economist at Capital Economics.
Growth in major export countries should pick up after they also started
the year slowly, she added, sticking to a forecast that the economy will grow
by 2.5 percent this year — up from last year's 2.2 percent.The Total Investment & Insurance
Solutions
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