Bundesbank: Strong growth in first quarter

Monday, 18. April 2016 13:04

The German economy has seen a "strong growth" in the first three months of 2016 – estimated at 0.3%, and it can be translated into the next quarter, but the economy could lose the pace in the second quarter, according to the latest Monthly Report from the Deutsche Bundesbank released on Monday.

Industrial output in February dropped by 0.5% compared to January; nevertheless, the annual growth in comparison to the same quarter a year ago has reached 2%. New orders in the industrial sector fell sharply in February, at the seasonally adjusted rate of 1.25%; sales in the sector fell 0.75% compared to the previous month. Construction sector saw a rise of 1.25%.

Employment increased significantly in February, but in slower pace when compared to the previous year, up 1.3% or 520 thousand new employees in the year ending in February.

Domestic investments totalled €9.9 billion, a fall from January's €15.2 billion, and mostly came from institutional investors.

The Federal Budget performed well in February, recording a surplus of €20 billion, a significant rise of €5.7 billion in one month, noticed the German central bank. Local budgets also ended 2015 with surplus of €3 billion, compared to a deficit of €0.5 a year ago.

Crude oil prices have rebounded by 18% in February, but were still 30% below prices seen a year ago, which would presumably – together with other prices – translate into negative inflation in the coming months. The bank, however, predicted that implied path of crude prices would have a positive influence on inflation.

In Frankfurt, the DAX index inched down 0.05% to 10,046 points at 1:05 p.m. CET, after a negative start in the morning. Leading advancers were: BMW AG up 1.20%, Commerzbank AG up 0.91% and Adidas AG up 0.62%. Energy companies were top decliners: RWE AG lost 2.80% and E.ON AG dropped 1.90%; and even host of the trade Deutsche Boerse slipped 0.66%. The TecDAX index was 0.26% in the green.

Oil prices were falling: Brent was down 3.30% at $41.72 a barrel, and WTI spilled 3.64% to $38.49 a barrel.

The euro was 0.19% stronger against the U.S. dollar, and rose 0.21% versus the U.K. pound, while dropping 0.09% compared to the Swiss franc; it jumped 3.04% versus the Russian rouble on the falling oil prices, which make up a huge part of the Russian economy, all at 1:02 p.m. CET.


Image: EPA / Frank Rumpenhorst

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