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Press Releases
May 15, 2007
German Economy on a Robust Growth Course;
GDP Trend in First Quarter 2007
According to the Federal Statistical Office’s Rapid Estimate released today, German GDP was up 0.5 percent in the first quarter of 2007, relative to the fourth quarter of 2006, after being adjusted for price increases, working-day variations, and seasonal changes. Compared with the same period in the prior year, GDP rose by 3.3 percent in real terms in the first three months of 2007 and as high as 3.6 percent when adjusted for working-day variations.
Federal Economic Minister Glos said: “The economy in Germany is on a robust growth course; it coped well with the increase in the value added tax rate.
It is a particularly positive sign that the impetus for growth – according to the indicators – was primarily generated by dynamic investment demand. Investments in the construction sector helped more than usual to lift the overall economy due to a very mild winter and lively demand for construction services. Investments in equipment also continued to accelerate on a clear expansion path. Private consumption likely fell relative to the previous quarter. This is due not least to purchases made in the final quarter of 2006 in anticipation of the higher value added tax rate, which took effect at the start of the new year. I expect this trend to normalize over the course of the year.”
With the good economy, the situation on the job market has continued to improve significantly. Labor-market reforms also likely contributed positively to this development. The employment trend was clearly on an upswing early in the year. There were roughly 570,000 more employed in the first quarter of 2007 than during the same period in the previous year. In addition, the number of full-time positions subject to the payment of social security contributions climbed particularly high.
Minister Glos: “The Federal Statistical Office’s figures show that the German economy is in full swing and our economic policy course is correct. The results for 2006 were also revised upward, from an adjusted 2.7 percent to now 2.8 percent. The good start to 2007 at the same time supports the federal government’s spring projection, which is based on an average annual increase in adjusted GDP of 2.3 percent for 2007.”
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