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German first-quarter GDP confirmed at 0.7%

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Staff writer ▼ | May 24, 2016
German gross domestic product grew at 0.7% in the first quarter compared with 0.3% in the final quarter of last year, Destatis said, confirming its flash estimate earlier this month.
German factory
Germany   On the year, GDP was up 1.6%
On the year, GDP was up 1.6%, also in line with the initial estimate. Destatis said positive contributions came mainly from domestic demand, which helped to offset weaker trade.

Household final consumption expenditure increased by 1.8%, while government final consumption expenditure was up 2.7%. Gross fixed capital formation in machinery and equipment rose a price-adjusted 2.4% on the first quarter of 2015.

Based on provisional figures, the economic performance in the first quarter of 2016 was achieved by 43.1 million persons in employment whose place of employment was in Germany. This was an increase of 533,000, or 1.3%, on a year earlier (see press release 166/16 of 18 May 2016).

Overall labour productivity calculated as price-adjusted gross domestic product per hour worked by persons in employment was up 1.1% on the previous year, whereas it stagnated when calculated per person in employment, according to provisional calculations.

Also in a year-on-year comparison, contributions to growth were mainly made by domestic demand in the first quarter of 2016.

Household final consumption expenditure increased by 1.8%, while government final consumption expenditure was up 2.7%. Gross fixed capital formation in machinery and equipment rose a price-adjusted 2.4% on the first quarter of 2015. Gross fixed capital formation in construction increased, too (+1.9%), particularly in dwellings and in public construction. On the whole, domestic uses rose by 2.0%.

Arithmetically, the balance of exports and imports had a downward effect on economic growth (0.5 percentage points) compared with a year earlier. Although exports of goods and services increased by a price-adjusted 1.5% on a year earlier, the increase in imports was markedly larger (+3.1%) in the same period.

On the production side of the gross domestic product, price-adjusted gross value added at the beginning of 2016 was higher than a year earlier in all economic sectors. The highest growth rates were recorded for financial and insurance activities (+2.5%) and for information and communication services (+2.3%). On the whole, the price-adjusted gross value added of all economic sectors was up 1.0% on the first quarter of 2015.

At current prices, the gross domestic product was up by 3.1% and the gross national income by 3.2% in the first quarter of 2016 on the first quarter of 2015. Net national income (at factor costs) rose by a total of 3.2%. According to first provisional calculations, the compensation of employees (+4.0%) grew markedly faster than property and entrepreneurial income (+1.8%).

Gross wages and salaries of employees rose by 4.3% and net wages and salaries by 4.2% on a year earlier. The average wages and salaries per employee did not rise that much (+2.7% in gross and net terms) because the number of employees went up as well (+1.5%) compared with the same quarter one year earlier. The disposable income of households was up by 2.5%, this rise being slightly higher than that of household final consumption expenditure at current prices (+2.4%).

In the context of the first calculation of data for the first quarter of 2016, the Federal Statistical Office also revised the national accounting results published previously for the quarters and the year of 2015. As reported in the first release of 13 May 2016, this did not lead to any changes for the GDP as a whole.

However, some GDP components in part had to be altered considerably. Also, with regard to seasonally and calendar-adjusted series, there may as usual be modified results for the entire time series as from 1991.

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