- Christian Schulz, economist at Berenberg
The German economy continues to post a better-than-expected data, with the nation's exports and industrial output rising more sharply than predicted in April. Seasonally adjusted exports rose by 1.9% on the month, according to Destatis, far outstripping the median forecast of economists for a 0.1% gain. April marked the third consecutive month of growth in exports. In the meantime, imports dropped 1.3%, against expectations for a 0.5% rise, widening German trade surplus to 22.3 billion euros. Moreover, industrial production increased 0.9% in April, following the 0.4% decline in the previous month and overshooting economists' consensus forecast for a 0.6% growth. Data last week showed German industrial companies received 1.4% more orders in April than a month earlier as strong foreign demand outweighed a slip in domestic demand.
In the first quarter gross domestic product of the Euro zone's number one economy expanded 0.3%, a marked slowdown from 0.7% growth in the final quarter of 2014, with foreign trade being the biggest downside contributor. In the second quarter, leading economic think-tanks expect the German economy to gain steam and grow 0.5%. For the whole year, the government expects domestic demand to fuel a 1.8% expansion, while the Bundesbank forecasts 1.7% growth.
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