An optimistic status report was published today by the Federal Ministry for economic affairs.The overall economic development is a sustainable one and continued with remarkable dynamism, says the Ministry. GDP, adjusted for price and season, increased by 0.5% after it had increased by 1.0% in the previous quarter. Thus, over one year GDP, adjusted for price, has increased by 3.3%.
The driving force behind this growth is investment in buildings and equipment which rose by 3.5% and 5.5% respectively in adjusted for prices-figures and thus grew very dynamically. Private consumption, however, decreased noticeably (-1.4 %) due to the VAT increase. All in all the domestic market made a positive contribution of 2.5% to GDP. The strongest stimulus in this context came from a strong increase in stock. There was, however, a trade deficit in the first quarter which amounted to -2.0%.
The prospects for a continuing upward economic development remain bright. The German economy which is highly competitive will also in the future benefit strongly from a rapidly expanding global economy. The ongoing domestic economic dynamism has fully captured the German labour market and will further enliven private consumption as employment and income increase in the course of 2007.