German economy boosts in first quarter, exceeds pre-crisis level

Posted on May 16, 2011 in AllEconomic News
The German economy expanded faster than expected in the first three months from the fourth quarter last year, confirming the country has exceeded the pre-crisis level in 2008, official data showed Friday.

The Wiesbaden-based Federal Statistics Office said that Germany’ s seasonally-adjusted gross domestic product (GDP) grew 1.5 percent in the first quarter, compared with the previous quarter, when the growth stood at 0.4 percent in rarely harsh winter weather.

The increase was well above economists’expectation, as most analysts forecast a 1-percent jump in the Europe’s largest economy.

On a yearly basis, the German economy boosted by a hefty 5.2 percent, the fastest pace since reunification two decades ago.

“The pre-crisis level of early 2008 has been exceeded,”the office said in a statement.

The office noted that exports, the country’s traditional economic driver, “had a smaller share in the strong GDP growth than domestic uses.” In fact, “the domestic economy was the main contributor to the growth.”

It added that Germany’s investment in equipment and construction, as well as consumer spending has played a significant role for the solid growth. Domestic demands and consumer confidence were maintained at a high level since last spring as the country’s unemployment rate dipped to 7.1 percent, the lowest in 19 years.

Moreover, emerging economies’strong demand for “made-in- Germany” luxury cars and high-end machinery also help accelerate the growth. In March, German exports surged 7.3 percent from last month and reached the highest monthly level since the country first kept such records in 1950.

The official data confirmed that even with eurozone debt crisis, soaring oil prices, and strong euro currency, Germany has managed to withstand all these challenges. “Germany is the engine of growth among industrial countries, and not just in Europe,” the country’s new Economy Minister Philipp Roesler said in a statement.

The German government revised last month its expectation on economic growth from a previous 2.3 percent to 2.6 percent, after the country registered a record 3.6 percent growth in 2010. Some economists believe the expansion would be at 3.0 percent this year.

On Friday, France, another economic power in Europe, also reported a 1-percent growth in its overall economy in the first quarter, higher than the previous market expectation of 0.6 percent.

via German economy boosts in first quarter, exceeds pre-crisis level – People’s Daily Online.