Rolling coverage of the latest economic and financial news, including new GDP figures from Europe’s largest economy
- Introduction: Germany grew by 0.4% in last quarter
- Consumer spending, construction and equipment investment all helped
- Minister: It’s a ray of hope
- Germany shrunk in Q3 2018, flat in Q4
Germany’s welcome return to growth in the last quarter suggests that any panic about the state of the eurozone’s largest economy was overdone, argues Carsten Brzeski of Dutch bank ING.
Today’s GDP data is balm for the soul of the German economy.
It also confirms our long held view that not all is bad in the German economy. Some of last year’s one-off factors have turned around, the German automotive industry might have seen better times but should not be written off and private consumption remains solid. In fact, the ongoing dichotomy between struggling industry and strong domestic demand continues and at least this time around ended with a positive outcome.
Just as weak GDP data in the second half of 2018 was not purely a result of wrong policies and business decisions or a sign that the German economic business model should be discarded, so today’s strong data is no reason for complacency.
Domestic demand has helped Germany’s economy extract itself from its recent stagnation, points out Aila Mihr of Danske Bank:
But she also points out that recent surveys of manufacturers have been gloomy, so 2019 could still be tough.
After narrowly avoiding a recession in H2 18, #German #GDP #growth rebounded to 0.4% q/q in Q1. Domestic demand continues to underpin growth and temporary headwinds unwind. But many risks to outlook linger amid goomy #PMIs, declining factory orders and potential US car #tariffs pic.twitter.com/lIvjykSsjS
Germany’s economy ministry Peter Altmaier has hailed today’s growth figures, calling them a “first ray of hope”.
But Altmaier has also warned that the US-China trade war is still threatening the German economy.
“The international trade disputes are still unresolved. We must do everything possible to find acceptable solutions that enable free trade.”
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
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