The German economy made a very positive start to the new year. Gross domestic product (GDP) in the period from January to March was 0.7 % up on the fourth quarter of 2015, the Federal Statistical Office in Wiesbaden reported. According to its press release, the moderate growth path of last year thus accelerated.

In addition, the Federal Statistical Office announced that consumer prices had fallen in April 2016 for the first time since January 2015. On average, the cost of goods and services was 0.1 % lower in April 2016 than in the same month last year. Consumer prices were also said to have declined by 0.4 % in the month from March to April 2016.

Domestic stimuli

According to the Federal Statistical Office, the contributions to the strong growth came mainly from domestic demand. "The final consumption expenditure of both households and general government increased at the beginning of the year," stated the statisticians. The construction sector, too, had benefited from the mild weather. Finally, enterprises had invested significantly more in machinery and equipment than they had done in the fourth quarter of 2015. Foreign trade, however, had a slight downward effect on economic growth because - according to their provisional calculations - imports increased more markedly than exports.

Economic growth amounted to 0.3 % in both the third and fourth quarters of 2015, according to the Federal Statistical Office. Price-adjusted German GDP in the first quarter of 2016 showed a year-on-year increase of 1.3 %, as is revealed by additional data. After calendar adjustment, the increase was as high as 1.6 % because there was one working day less than in 2015.

The inflation rate, as measured by the consumer price index, is reported to have been pushed down by the low costs of energy. "The prices of energy (total) were down 8.5 %" on a year earlier, according to the Federal Statistical Office. The fact that Easter fell early this year also had a downward effect on prices. In a year-on-year comparison, prices were down especially for package holidays.