Germany’s economy grows 0.2% in Q1, beats expectations

12 May 2010 16:21  [Source: ICIS news]

TORONTO (ICIS news)--Germany’s economy grew 0.2% in the first quarter of 2010, a sequential increase from the 2009 fourth quarter, as the country slowly gains momentum after the deep recession, Germany’s federal statistical office said on Wednesday.

Drivers of growth in the first quarter were higher exports and increased investments in machinery and equipment, the Statistisches Bundesamt said.

Economics minister Rainer Bruderle said first-quarter growth was better than expected, given that it came against a harsh winter. Most analysts had expected a sequential decline in growth.

The growth in the first quarter compares with sequential increases of 0.2% in the 2009 fourth quarter, 0.7% in the third quarter and 0.4% in the second quarter of last year.

Compared with the 2009 first quarter, 2010 first-quarter GDP increased 1.7% year on year, the statistical office said.

Bruderle said the latest data showed that growth was getting firmer and Germany should see a “self-sustaining recovery” in the course of 2010.

However, in order to support growth, it was important that the EU take measures to stabilise the euro, he said. The EU currency has fallen sharply over the past weeks in the wake of Greece’s debt problems.

Last week, the economics ministry reported that production in Europe’s largest economy in March rose by 4% month on month, while March factory orders rose 5% from February.

Economists have forecast Germany’s full-year 2010 GDP growth to be 1.7%.

The country’s chemicals production is expected to grow 5% this year compared with 2009, when production fell 10% from 2008.

In related news, first-quarter economic growth in the EU was reported up 0.2%.

The Statistisches Bundesamt, based in Wiesbaden, is to release on 21 May a detailed report on Germany's economy in the first quarter.

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By: Stefan Baumgarten
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