German economic growth slowed to 0.3 percent in the first quarter, its weakest performance in more than a year, though analysts largely blame one-time factors like bad weather and expect a rebound.
The quarter-on-quarter growth reported yesterday by the Federal Statistical Office compared with an expansion of 0.6 percent in the fourth quarter of 2017 and 0.7 percent in the third.
It was the slowest pace since the third quarter of 2016, when growth was also 0.3 percent. Economists had predicted a slightly brisker 0.4 percent, but concurred that the lackluster showing doesn't ring alarm bells. The statistics office said that, while investment in construction and equipment rose, government spending was lower and both exports and imports decreased. That fits a recent pattern of German growth being supported above all by domestic demand.
Despite the setback, it was the 15th consecutive quarter of growth, making this Germany's longest upswing since 1991.
The first-quarter data were "probably distorted" by an early Easter vacation, cold winter weather and now-ended strikes, said Carsten Brzeski, an economist at ING-DiBa in Frankfurt. He said that there are promising signs of a rebound over the coming months. "While uncertainties and downside risks remain - mainly stemming from a possible escalation of the current trade tensions - there is, in our view, little reason to doubt the underlying strength of the current recovery," Brzeski said in a research note.
Martin Wansleben, the chief executive of the Association of German Chambers of Commerce and Industry, said that "the start to the year is a disappointment, but not the beginning of the end of the upswing." He pointed to "a series of special factors" that also included a major flu outbreak.
The economy will be boosted by increased government spending on child benefits and pensions in upcoming quarters, said Jennifer McKeown, chief European economist at Capital Economics. Growth in major export countries should pick up after they also started the year slowly, she added, sticking to a forecast that the economy will grow by 2.5 percent this year - up from last year's 2.2 percent.
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