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The
Federal Statistical Office had reported at the end of last month
that the economy expanded by 0.2% in the January-March period
compared with the previous quarter. The head of the office, Ruth
Brandt, said that “the surprisingly good economic development
seen in March” led to the revision.
The last time Germany saw stronger growth was in the third
quarter of 2022, when gross domestic product expanded by 0.6%.
Germany has struggled to generate significant growth for years
and the economy shrank in each of the last two years. In last
year's fourth quarter, it contracted by 0.2%.
In its first forecast since new Chancellor Friedrich Merz’s
government took office earlier this month, the government's
panel of independent economic advisers predicted on Wednesday
that GDP will stagnate this year and grow by 1% next year.
It pointed to headwinds from U.S. President Donald Trump’s
tariffs and trade threats, but said a huge infrastructure
investment package put together by Merz’s coalition offers
opportunities for an improvement next year.
Carsten Brzeski, global chief of macro at ING bank, said the
improved first-quarter showing looks set to be “a positive
one-off” at least in the short term, fueled by businesses trying
to get ahead of Trump's tariffs.
“As a result of the announced tariffs and in anticipation of
‘Liberation Day,’ German industrial production and exports
surged in March,” Brzeski said in a research note.
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