German economy 'gaining speed'

Europe's biggest economy sees 1.5 per cent growth in first quarter, a level not seen since the global economic crisis.

    The German economy was driven by construction and consumption, with improving domestic demand [EPA]

    Germany's economy grew by 1.5 per cent in the first quarter, official data showed, pushing growth to a level not seen since the 2008 financial crisis.

    The figures released on Friday come amid economic turmoil in the eurozone, with fears of a debt crisis spreading across the region as well as spiralling oil prices, inflation and interest rates.

    "Germany is the growth engine among industrialised nations, and not only in  Europe," Philipp Roesler, the incoming economy minister said in a statement.

    "The numbers prove that the German economy is gaining further speed."

    The figures for the first three months of the year exceeded economist's forecasts and was nearly four times the figure of 0.4 per cent seen for the final quarter of last year.

    Germany's federal statistical office said construction and consumption were the main drivers.

    The German economy has benefited over the past year from strong demand for machinery, cars and other goods from a recovering global economy, coupled with improving domestic demand.

    Data released earlier this week showed that German exports and imports both rose in March to their highest monthly level since the country started keeping records in 1950.

    Carsten Brzeski, an economist at ING in Brussels, Belgium, told the AP news agency that Germany looked set to continue strong growth.

    "The strong labour market, richly filled order books and simply the right export mix at the right time bode well for future growth," he said.

    He said that following full-year growth of 3.6 per cent in 2010, Germany looks set for growth of at least 3 per cent this year.

    "With the strengthening labour market, wage increases and pent-up demand, private consumption should become the next important growth driver".

    Meanwhile, France, which with Germany account for nearly half the eurozone's gross domestic product, posted a growth rate of one per cent growth one per cent. The national statistics institute forecast that GDP growth for the year would be no less than 1.6 per cent.

    SOURCE: Agencies


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