German economy grows surprisingly in first quarter

08:51, May 13, 2010      

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Germany's economy grew a modest 0.2 percent in the first quarter of 2010, beating market forecasts of stagnation, as reviving exports and investments warmed up the freezing recovery caused by a rarely cold winter, official figures showed Wednesday.

The Federal Statistics Office said in a report that Germany's gross domestic product (GDP) posted a 0.2-percent growth from January to March, comparing to the final quarter last year. Economists predicted earlier that the German economy would see zero growth in the first quarter as the eurozone area has sunk into serious debt troubles.

The preliminary figures showed the economy rallied 1.7 percent year on year in the first quarter, a strong growth which also exceeded experts' forecasts.

The office also revised Germany's GDP decline in full-year 2009 to 4.9 percent, rather than the previously calculated 5.0 percent.

In the fourth quarter of 2009, the economy actually registered a 0.2-percent increase instead of former figure of zero percent shown in February, the office added.

Some analysts said foreign trade continued to be the strongest engine for the economic recovery. Germany's seasonally-adjusted exports jumped 10.7 percent in March on a monthly basis, while imports were up by 11.0 percent. The trade surplus has widened to 17.2 billion euros (22.3 billion U.S. dollars) from 12.7 billion euros in February.

The euro's 16-percent depreciation since the outbreak of Greek debt crisis also give German exports more advantages in global markets, some economists noted.

"The German economy is slow in gaining momentum," the office said in a statement. "Although the upward trend for the German economy in the second and third quarter of 2009 slightly slowed down, it continued despite the relatively cold and long winter."

The coldest winter in 14 years from November to February forced citizens to abandon travel and consumption plans and suppressed out-door constructions in the Europe's largest economy, marking a low tide in the country's recovery from global crisis, experts said.

The German government predicted that its economy will grow 1.4 percent in 2010, and 1.6 percent in 2011, after a severe contraction in 2009, the largest slide since World War II.



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