German economy expands sharply | Business| Economy and finance news from a German perspective | DW | 12.05.2017
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Business

German economy expands sharply

The economy in Europe's powerhouse has maintained its momentum, growing sharply again in the first three months of the year. Analysts said strong domestic consumption and investments were behind the expansion.

The German economy gathered steam in the first quarter of 2017, official data from the National Statistics Office, Destatis, showed Friday.

It reported that gross domestic product expanded by 0.6 percent in the January-to-March period quarter on quarter.

For the whole year, leading German research institutes and the government expect the economy to grow by 1.5 percent.

"In the face of a number of economic and political uncertainties, it remains to be seen whether the current momentum can really be kept up," Sal. Oppenheim analyst Ulrike Kastens warned.

Spending spree

But the bulk of economists in the country were more optimistic. "Full order books everywhere have emboldened companies to invest a lot more as they expect the economic pick-up to continue in the months ahead," VP Bank analyst Thomas Gitzel told Reuters.

The Q1 result was partly due to higher private household spending, but also a result of higher state spending, with more resources going into accommodating and integrating refugees and migrants.

Export-oriented firms continued to profit from a weaker euro, which fueled shipments abroad. In March 2017, Destatis recorded the highest ever export volume for the month.

The statistics agency pointed to companies' increased willingness to invest more in machinery and equipment.

hg/jd (dpa, AFP, Reuters)

 

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