Tyskland

German Economic Growth Quickened in First Quarter (Update2)

By Gabi Thesing

May 15 (Bloomberg) -- Economic growth in Germany, Europe's largest economy, accelerated to the fastest pace in 12 years in the first quarter as companies stepped up spending on machinery and construction.

Gross domestic product rose 1.5 percent from the fourth quarter, when it increased 0.3 percent, the Federal Statistics Office in Wiesbaden said today. That's the highest quarterly growth rate since the second quarter of 1996. Economists forecast 0.7 percent expansion, according to the median of 33 estimates in a Bloomberg News survey.

Good weather kept building sites open in the three months through March, aiding a construction industry already recovering from a decade-long slump after booming exports fueled company investment last year. Still, there is evidence growth has started to slow as higher credit costs, faster inflation and a stronger euro erode consumer spending and export competitiveness.

``The surprisingly strong performance was almost entirely driven by the absence of a winter and masks a much weaker trend,'' said Holger Schmieding, chief European economist at Bank of America Corp. in London. ``From now on, German growth will stagnate.''