FRANKFURT: The German economy, after starting the year weakly, looks set to gather momentum later with consumer and business confidence on the rise, data indicated yesterday.
Final data published by the federal statistics office Destatis showed that Germany’s gross domestic product (GDP) notched up anaemic growth of 0.1 percent from January to March, with only consumer spending in positive territory.
While weak, the numbers meant the German economy has successfully skirted a recession following a sharp contraction of 0.7 percent in the previous quarter, since a recession is technically defined as two quarters running of economic contraction.
But a breakdown of the figures appeared to offer little cheer, since among the different GDP components only private consumer spending was positive, growing by 0.8 percent.
Public-sector spending slipped by 0.1 percent, investment tumbled 2.4 percent, imports were down 2.1 percent and exports contracted by 1.8 percent, the statisticians calculated.
Destatis blamed the unexpectedly weak start to the year to the “extreme winter weather conditions.”
Nevertheless, the government, economic think-tanks and analysts are all convinced the economy will start picking up speed soon.
Two new key confidence surveys also published on Friday fed such optimism.
German business confidence rose unexpectedly in May, with the Ifo economic institute’s closely watched business climate index rising to 105.7 points in May from 104.4 points in April.
And on the consumer front, too, German households are not allowing forecasts of a eurozone-wide recession sour their optimism and the GfK institute said its monthly consumer confidence index is forecast to rise to 6.5 points in June from 6.2 points in May.
AFP
