Hamilton Crawford – German economic growth slows as foreign trade and government spending decline.
Hamilton Crawford economists say that although economic growth in Europe’s largest economy decreased by 50% in the first quarter of this year, pushed down by weaker trade and reduced government spending, this slowdown was likely temporary.
According to data released by the Federal Statistics Office, Germany’s economy expanded by 0.3 percent in the first quarter of 2018, making it the weakest rate of growth since the period from July to September two years ago.
Hamilton Crawford analysts had predicted a 0.4 percent expansion for the first quarter after growth reached 0.6 percent in the final quarter of 2017 but, even though growth halved in the first quarter of this year it was still the 15th straight quarter of growth for Germany, making it the longest streak of continuous expansion since Germany’s reunification in 1990.
Hamilton Crawford analysts believe the slower growth is just temporary, citing persistent strong international demand and robust domestic activity fueled by record low rates of unemployment and strong wage growth.
The Federal Statistics Office says that first quarter economic expansion was mainly due to strong domestic demand even with weaker trade data.
Hamilton Crawford economists stated that investment was on the rise while household spending continued to increase and government spending declined.
On an annualized basis, Europe’s biggest economy expanded by 2.3 percent in the first quarter, slightly less than the 2.4 percent predicted by Hamilton Crawford economists.
Hamilton Crawford economists maintain that although Germany’s economic upswing has slowed slightly, strong growth and the positive outlook remains intact.