German economy expands 2.3 pct year-on-year in Q1 on investment and private consumption
Source: FxWire Pro - Commentary / 24 May 2018 15:44:20 America/New_York
The second estimate of German first quarter economic data showed no changes from the earlier estimates of 0.3 percent sequential growth and 2.3 percent year-on-year growth. However, the expenditure breakdown, released for the first time, was widely favorable. Investment grew 1.7 percent sequentially in the first quarter, mainly driving the economic growth. Private consumption also contributed positively to the economic growth in spite of some subdued indicators from the retail sector.
Having moved sideways in the earlier two quarters, consumption rose 0.4 percent sequentially in the first quarter, albeit still lower than the rates seen in the first half of last year. On the contrary, government, which fell 0.5 percent, had an unusual dampening impact on growth. The latest quarter saw an abrupt change in that trend with imports and exports dropping 1 percent sequentially and 1.1 percent, marking the softest quarters since the second quarter of 2009 and fourth quarter of 2012 respectively.
“So overall, while the adjustment in exports against the backdrop of increased global trade policy uncertainty is something to keep an eye on, the strength of final domestic demand in Q1 was certainly better than one might have feared”, stated Daiwa Capital Market Research in a report.
At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bearish at -143.324, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 21.7389. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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