Anaemic economy feels winter chill
Published on: 15 May 2013 09:26 CET
German gross domestic product (GDP) expanded by just 0.1 percent in the period from January to March, the federal statistics office Destatis calculated in a preliminary estimate.
Analysts had been expecting a slightly bigger rebound of around 0.3 percent after the economy shrank by a revised 0.7 percent in the fourth quarter of 2012.
"The extreme winter weather conditions played a role in this weak growth at the beginning of the year," Destatis said in a statement.
"According to our calculations, the only positive impulses came from private households which increased their spending at the start of the year."
In foreign trade, imports fell sharply and exports also declined, the statisticians said, without providing a more precise breakdown of the different GDP components. Detailed growth figures are scheduled to be released on May 24.
Unlike most of its eurozone neighbours, Germany has been spared the worst of the region's long and debilitating sovereign debt crisis, even if growth slowed noticeably in the latter part of 2012. But the government, the Bundesbank and the economic think-tanks are all projecting a return to growth this year.
Just last month, Economy Minister Philipp Rösler said that the German economy could "look to the future with optimism", despite recent disappointing economic data and falling confidence.
"2013 will be a good year," Rösler had said, upgrading Berlin's growth forecast for the current year to 0.5 percent from a previous prognosis of 0.4 percent.
"The German economy is picking up. It is leaving the winter behind it," Rösler said at the time.
Analysts were disappointed by the first-quarter GDP figures. Growth was "anaemic", said Newedge Strategy analyst Annalisa Piazza.
"The outcome is softer than anticipated. In a nutshell, the German economy seems to have struggled to gain momentum in the first quarter despite signs of resilience in its industrial activity data," she said.
Berenberg Bank economist Christian Schulz said that "much of the disappointment is probably due to the very harsh and long winter, which held back construction and parts of manufacturing."
Germany "will have to rely on domestic demand for growth this year," Schulz said.
Its fundamentals were very strong, with employment rising, inflation low, wages rising and very low borrowing costs for companies and households.
"For exports, Germany's traditional growth engine, the outlook remains more clouded this year," the expert warned.
Demand from the eurozone, Germany's most important export market, would remain weak for a while. China was experiencing growth wobbles and global competition from Japan due to the weak yen would be tough.
"Still, based on strong fundamentals, German growth should accelerate over the course of 2013 and reach trend rates in the second half. A strong Germany also boosts export chances for the eurozone periphery," Schulz said.