The German economy continued to grow at a slightly slower pace while in France GDP (gross domestic product) increased at a faster pace in Q1 (first quarter) 2015. German and French exporters did not benefit from weakness in the euro, as the European Central Bank began its €1.1tn bond-buying program while German industrial production fell by 0.5% in March. In France in Q1 2015, production in goods and services rose by 0.7% after stagnation at the end of 2014.
Destatis, the German federal statistics office reported Wednesday that, in the first quarter of 2015 (GDP) rose 0.3% from the fourth quarter of 2014 after adjustment for price, seasonal and calendar variations. In the last quarter of 2014, a marked increase of 0.7% was recorded. In France, INSEE (Institut National de la Statistique et des Études Économiques) reported in Paris that GDP in volume terms increased by 0.6%, after stagnation in Q4 2014.
The German quarter-on-quarter comparison shows that positive contributions mainly came from domestic demand, according to provisional calculations. Households and general government increased their final consumption expenditure at the beginning of the year. Capital formation increased, too. Fixed capital formation in both construction and machinery and equipment was markedly up compared with the fourth quarter of 2014. Foreign trade, however, had a downward effect on economic growth. Although, exports of goods and services were slightly up at the beginning of 2015 compared with the fourth quarter of 2014, imports recorded a much stronger increase.
The country's economy grew in a year-on-year comparison, too. The price-adjusted GDP rose 1.1% in the first quarter of 2015 (+1.0% after calendar adjustment).
The economic performance in the first quarter of 2015 was achieved by 42.4m persons in employment in the domestic territory, which was an increase of 275,000 or 0.7% on a year earlier.
In France in the three first months of 2015, household consumption expenditure accelerated (+0.8% after +0.1%) while total gross fixed capital formation (GFCF) decreased again (–0.2% after –0.4%). Overall, total domestic demand (excluding inventory changes) increased: it contributed for +0.5 points to GDP growth (after +0.1 points in Q4 2014).
Exports slowed (+0.9% after +2.5% in Q4 2014) while imports accelerated (+2.3% after 1.5%).The foreign trade balance contributed negatively to activity (–0.5 points after +0.2 points in the previous quarter). Conversely, changes in inventories contributed positively: +0.5 points after –0.3 points at the end of 2014.
Eurostat will publish EU and Eurozone GDP data at 10:00 am today.