German Growth Picks Up After Q1 Slowdown

The German economy is in a strong upswing despite data showing growth in Europe’s largest economy was weaker in early 2018 than in late 2017, the finance ministry said on Tuesday.
Economic output grew by 0.3% in the first quarter after expanding by 0.6% in the last three months of 2017. The finance ministry said the slowdown was due to temporary factors like sickness and strikes hitting industrial production and an above-average number of public holidays for the quarter, Reuters reported.
“The German economy is in a strong economic upturn even if growth in the first quarter of 2018 was a bit less dynamic than in the final quarter of last year due to special factors,” the finance ministry wrote in its monthly report.
The ministry said industrial orders remained at an extraordinarily high level and added that export activity at German firms was likely to benefit from the global economy’s robust development.
It said a strong German labor market, wage rises, moderate inflation and an agreed increase in pensions from the middle of the year meant income development was likely to be solid and that would in turn continue to support private consumption.
The German government expects the economy to grow by 2.3% in 2018 as a whole.
Meanwhile, Germany turned into a net power importer on a weekly basis for the first time in three years as strong hydro across the Alpine region offset lower wind and solar generation, Platts reported.
German hydro output had its best week on record as snowmelt combined with downpours in the Alpine region and German hydro plants generating 750 GWh of electricity in week 20, averaging 4.5 GW, data going back to 2011 shows.
The German hydro data can be seen as proxy for Swiss and Austrian hydro output with Alpine hydro at elevated level since April following near-record snow fall across the Alps this winter.