German Q1 GDP Rises
The Eurozones largest economy has posted a positive update to this years first quarter growth. Q1 GDP numbers have today been made available by Germany’s Department of Statistics. The headline year on year figure has shown significant improvement in the first three month of this year coming in at 2.5% year on year as opposed to the previous reading of just 1.3%, consensus estimates were for an increase to 2.3%. The week day adjusted version of this number also hit 2.5%, up from the prior reading of 1.4%. On a quarterly basis German GDP improved to 0.8% from the 0.4% expansion experienced in the prior quarter, this 0.8% figure exactly met market expectations.
A further clarification of the German economic picture emerged through the publication of this month’s important IFO sentiment numbers where across the board confidence is off slightly in the month of May. The IFO Business Climate number came in at 110.4, down on the April reading of 111.2 and also behind the expected 110.9. The IFO Current Assessment Number has been released as 114.8, below the 115.3 experienced last month and also missing the 115.5 expected by markets. Finally the IFO Expectations figure showed at 106.2 this month compared to the April reading of 107.3 and the markets expectation of 106.6.
Surprisingly strong GDP growth will be welcomed in Germany and across the Eurozone. The only element that stands out from today’s data is the IFO Expectations number which is normally positive, one month’s soft IFO numbers however are unlikely to cause much concern so long as the negativity does not become a trend. The German economy is recovering in line with other major developed nations, it is however about to undergo a round of monetary easing for the sake of it’s less well performing Eurozone colleagues.
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