Germany: Economy stumbling into 2018 - ING

The German economy stumbled into 2018 as GDP growth in the first quarter came in at 0.3% QoQ, from 0.6% QoQ in the final quarter of 2017, explains Carsten Brzeski, Chief Economist at ING.

Key Quotes

“The first quarter was the weakest German economic performance since 3Q 2016. Still, on the year, growth came in at 2.3%. GDP components will only be released at the end of the month but according to the Statistical Agency and available monthly data, the growth slowdown was mainly driven by investments and private consumption. Trade and government consumption were a drag on growth.”

“In our view, this is very much a semantic discussion with little substance but lots of room for speculation. The German economy has now grown for 15 consecutive months, the longest lucky streak since reunification. Of the last 36 quarters, the economy grew in 33. While uncertainties and downside risks remain - mainly stemming from a possible escalation of the current trade tensions - there is, in our view, little reason to doubt the underlying strength of the current recovery.”

“In fact, taking a closer look at the German economy shows promising signs of a rebound in the coming months.”

“All in all, with a growth rate of 0.3% QoQ, the German economy got away with no more than a black eye.”