A rebound in consumer spending helped the German economy thwart recession in the first quarter of 2013, detailed data from the Federal Statistical Office revealed Friday. However, the continued fall in firms' fixed asset investment and extreme weather conditions stifled the recovery.
Nonetheless, the economy is likely to get further boost from consumers with market research group GfK predicting further improvement in consumer confidence in June.
Gross domestic product rose 0.1 percent quarter-on-quarter in the first quarter/ The growth figure, adjusted for seasonal and calender variations, was unchanged from the preliminary estimate released on May 15. This comes after a steep 0.7 percent contraction in the fourth quarter of 2012.
"One of the reasons for this small growth at the beginning of the year, however, was the extremely cold weather," the statistical office said in a statement.
German optimism is set to reach its highest level in more than five years as GfK's forward-looking index for June rose to 6.5 in June from 6.2 in May, results of the monthly survey showed today. The June score was the highest since September 2007.
In May, Germans' economic and income expectations improved slightly, while willingness to buy stabilized at an extremely high level. "A high level of employment and good collective bargaining agreements coupled with falling inflation are all strengthening confidence," the firm said in the survey report.
In a quarter-on-quarter comparison, positive contribution came almost entirely from household final consumption expenditure, which rose 0.8 percent from the previous quarter.
Gross fixed capital formation continued its downward trend. Investment in machinery and equipment fell 0.6 percent quarter-on-quarter and in construction, it fell 2.1 percent. General government spending edged down 0.1 percent.
"German consumers remain the silent helpers of the economy," said Carsten Brzeski, an economist with ING Bank NV. "In fact, private consumption grew in each since quarter since 1Q 2012."
"Looking ahead, all ingredients are in place to see a continuation of solid consumption," Brzeski said.
The balance of exports and imports had almost no effect on economic growth in the first quarter of 2013, adding just 0.1 percentage point to overall growth, the statistical office said. Imports of goods and services fell 2.1 percent in the first quarter and exports decreased 1.8 percent.
GDP fell 0.2 percent year-on-year in the first three months of this year on a calender adjusted basis. At the same time, the unadjusted GDP fell 1.4 percent year-on-year. These numbers also matched preliminary estimates.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.