German economy fends off recession, grows 0.4 percent in Q1

16:13 | 16/05/2019 Cooperation

The German economy received a welcome impetus on Wednesday with the announcement that the country's gross domestic product grew by 0.4% in the first quarter of 2019.

This followed a poor performance in the second half of 2018. In the third quarter of last year, the economy saw negative growth of 0.2% and stagnated in the year's last sector.

Expectations for growth in 2019 had been lowered to 0.5%, from 1%, but the first quarter could suggest a slightly more optimistic year ahead for Europe's largest economy. This latest development will allay fears, at least for now, that Germany will fall into a recession.

German economic analyst Jens-Oliver Niklasch of LBBW bank confirmed a more positive outlook may be necessary, telling the AFP news agency, "The start gives hope that 2019 might not turn out as bad as the latest forecasts."

The Federal Statistical Office cited private consumption and a thriving construction industry as the principal reasons for the upturn.

Nevertheless, Niklasch urged caution: "Given the weakness of industrial performance and risks from overseas, caution will continue to dominate."

German Economy Minister Peter Altmaier greeted the news with a sigh of relief suggesting that it was a "first ray of hope" but echoed Niklasch's sentiments that there would be further obstacles ahead, such as international trade conflicts.

Theo dw