German economy revives in first quarter of 2019

Germany's economy bounced back as expected in the first quarter of 2019 as consumers spent more and construction and equipment activity increased.

GDP increased 0.4% in the three months to the end of March from the previous month when growth was flat, the country's statistics office said as it reported preliminary figures.

Growth in the first quarter was in line with economists' expectations and showed Europe's biggest economy recovering after narrowly avoiding a recession at the end of 2019. Private consumption increased and investment in equipment and construction rose.

But with the China-US trade dispute continuing and the threat of US tariffs on German cars, clouds still loom over the outlook for Germany's export-led economy. The statistics agency said there were "mixed signals" from external demand.

Peter Altmaier, Germany's economy minister, said: "The growth in the first quarter of this year is a sign of light but it's no reason to sound the all-clear. We must do everything we can to swiftly find sustainable solutions which enable free trade." The comments were reported by Reuters.

Germany's return to growth helped the eurozone economy pick up. The currency zone's GDP also rose 0.4% in the first quarter after rising 0.2% in the last three months of 2018.

Andrew Scott, associate director at risk adviser JCRA, said: "German GDP data for the first quarter provided reasons to be hopeful that Europe’s largest economy isn’t headed for a protracted downturn. But there are plenty of concerns for the world’s second largest exporter, as protectionist policies continue to dampen global trade, while Eurozone economic growth remains weak."