BERLIN, April 30 (Xinhua) -- The German economy grew by 0.2 percent in the first quarter of 2024 compared to the previous quarter, indicating a slow recovery from last year's recession, according to figures published by the Federal Statistical Office (Destatis) on Tuesday.
This growth was prompted by an increase in gross fixed capital formation in construction and exports, Destatis noted. However, private consumer spending saw a decline.
"The German economy made a surprisingly strong start to the new year," said Jan-Christopher Scherer, economic expert at the German Institute for Economic Research, on Tuesday. He added that "the worst seems to have been overcome."
Consumer spending will likely increase again, as inflation has fallen significantly and wage increases from recent collective bargaining agreements are becoming more noticeable, Scherer explained.
After inflation in Germany peaked at over 10 percent during the energy crisis at the end of 2022, the rise in consumer prices has gradually slowed and stabilized at 2.2 percent in April this year, according to figures by Destatis.
The German government made a slight upward revision last week to its forecast for the current year, and is now expecting growth of 0.3 percent instead of the 0.2 percent predicted at the turn of the year.
"We are now seeing signs of a slight economic upturn and that the economy is slowly emerging from its weak phase," said Economics Minister Robert Habeck when presenting the spring projection.
In light of growing cost disadvantages in industry, Habeck called for structural changes. Essential measures include enabling new economic dynamism, strengthening innovation, reducing unnecessary bureaucracy, and tackling the labor shortage.
Germany's industry is facing tough times ahead. The Federation of German Industries (BDI) predicted that industrial production will continue a downward trend this year, falling by 1.5 percent year-on-year, while exports are set to stagnate.
Industry in Europe's largest economy "has not yet recovered from the cost and demand shocks from extremely high energy prices at times, and from inflation," said BDI president Siegfried Russwurm at the start of the Hanover trade fair last week.
