The German聽economy聽expanded marginally between January and March, official figures published Tuesday showed, dodging a recession after a weak end to 2023.
Output rose by 0.2 per cent in the first quarter of 2024 in comparison with the previous three months, federal statistics agency Destatis said in preliminary figures.
Europe鈥檚 largest聽economy聽shrank 0.5 per cent in the fourth quarter of 2023, Destatis said.
The revised figure was worse than its previous estimate that GDP fell by 0.3 per cent in the quarter.聽
The statistics agency however revised its estimates for the whole of 2023 up, suggesting the German聽economy聽contracted only 0.2 per cent over the year instead of 0.3 per cent.聽
The increase in the first quarter of 2024 reflected an improvement in the construction industry and in exports, Destatis said.聽
Household consumption however fell in the quarter, the agency said.
The economic mood in Germany has been pessimistic in recent months, as businesses have had to manage increased energy costs, high inflation and rising interest rates.
But with the costs for energy coming down and inflation easing, the outlook has improved.聽
The government last week adjusted up its forecasts for 2024, predicting growth of 0.3 per cent instead of 0.2 per cent.
The first quarter improvement showed 鈥榯he German聽economy聽can still grow after all鈥�, ING bank analyst Carsten Brzeski said.
鈥極ptimism has returned to聽the German聽economy,鈥� he said.
The rebound would however be limited by 鈥榮tructural weaknesses鈥�, Brzeski said.
鈥楬igher oil prices as a result of the military conflict between Iran and Israel, as well as the ongoing tensions in the Red Sea, are likely to weigh on industry and exports once again,鈥� he said.
An increasing number of insolvencies could also weaken the labour market, Brzeski warned.
Unemployment in Germany however remained stable, according to figures published by the federal employment agency on Tuesday.聽
The joblessness rate stood at 5.9 per cent in April, the BA federal labour agency said.
