Germany’s economic expansion in the first quarter was driven primarily by exports, a detailed breakdown of the data shows.
Exports rose 1.7 percent from the fourth quarter of 2011, the Federal Statistics Office in Wiesbaden said today. Gross domestic product in Europe’s largest economy increased 0.5 percent, the office said, confirming an initial estimate published on May 15. Exports added 0.9 percentage point to growth.
The German economy, Europe’s largest, is outperforming its euro-area neighbors as the sovereign debt crisis continues to batter nations from Greece to Spain. Exporters of goods including cars are benefitting from demand in faster growing emerging markets such as China, and falling unemployment is aiding domestic consumer spending.
“It’s a clever strategy to be selling your goods where the action is and not just on your doorstep,” said Jens Kramer, an economist at NordLB in Hanover. “Both foreign and domestic demand are driving the German economy.”
The euro was little changed after the report and traded at $1.2570 at 8:11 a.m. in Frankfurt.
Private consumption rose 0.4 percent in the first quarter, contributing 0.2 percentage point to growth, and government spending increased 0.2 percent, today’s report shows. Capital investment dropped 1.1 percent from the fourth quarter, with construction sinking 1.3 percent. Domestic demand cut 0.3 percentage point from first-quarter growth, according to the report.
German growth in the first three months of the year offset declines in GDP in at least five other countries and helped to prevent the euro-area economy from shrinking for a second straight quarter.
Germany’s economy, which contracted 0.2 percent in the final quarter of 2011, will grow 0.7 percent in 2012 and 1.7 percent in 2013, the European Commission forecast on May 11. By contrast, the euro region’s and those of seven member countries will shrink this year, it said.
“The German economy has avoided a recession and staged an impressive growth comeback,” said Carsten Brzeski, senior European economist at ING Group in Brussels. “The rest of the euro zone, however, will have to continue its quest for growth.”
Evonik Industries AG, the German specialty chemicals maker that’s preparing an initial stock sale, raised its 2012 profit and sales forecasts on May 11, after first-quarter results were better than the company had expected.
At the same time, Metro AG, Germany’s biggest retailer, yesterday stuck to a forecast that profit won’t increase this year as consumers limit spending amid doubts over the effects of the debt crisis on the economy.
“Germany has consistently decoupled from what’s going on in the euro area,” said Jens Sondergaard, senior European economist at Nomura International PLC in London. “The question is how long can this continue.”