Higher consumer spending helps boost German economy

Broad-based upswing pushes German economy into higher gear
Higher consumer spending helps boost German economy
Author

13 May, 2017

The Euro was steady early in Friday's European session as German growth an inflation numbers came in right on market expectations.

Although growth slowed, France's economy added almost 50,000 new jobs in the first three months of the year, marking seven consecutive quarters of net new job creation, data from the Insee statistics agencies showed on Friday.

Household and state spending were strong, while firms invested money in construction and equipment, said German statistics authority Destatis.

Germany's economy gathered momentum in the first quarter of 2017, growing by a quarterly rate of 0.6 percent, with increases in both foreign and domestic demand.

Europe's largest economy is widely forecast to maintain solid growth, despite global geopolitical and economic uncertainties.

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First-quarter GDP growth was 0.6%, faster than the October-to December 2016 figure of 0.4%.

Using a year-on-year comparison, GDP expanded by 1.7 per cent from the first quarter of 2016, adjusted for calendar effects, Destatis said.

The U.K., Japan, France and Italy also recorded lower growth rates than Germany.

Looking ahead, Germany could surprise observers with even faster growth over the rest of the year, said analyst Florian Hense of Berenberg bank.

The steady creation of new jobs, nearly exclusively in services, since the second quarter of 2015, is gradually helping heal France's labour market after huge job losses during the financial crisis.


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