German economy loses steam

The German economy grew just 0.3 percent in the first three months of the year, the national statistics office, Destatis, announced Tuesday while presenting its first estimate of first-quarter developments.

Economic expansion in Europe's powerhouse thus slowed to half the pace seen in the previous quarter; the final three months of 2017.

While leading research institutes had penciled in slower growth, the estimate fell short of their 0.4-percent expansion forecast for the beginning of 2018.

Destatis made a point of emphasizing that the 0.3-percent uptick in the first quarter marked the 15th consecutive rise and thus the longest steady economic upswing since 1991.

Germans still on a spending spree

First-quarter growth was driven mainly by private consumption, corporate investments in machinery and equipment and an ongoing boom in the building industry.

Despite the slower growth in the January-to-March period, the German government says it will stick to its forecast of 2.3-percent growth for the whole of 2018, adding that the dent reported by Destatis was attributable to a large number of strikes in the metalworking industry and a higher number of public holidays.

The president of the German central bank, Jens Weidmann, looked more alarmed about Germany's overall growth prospects, pointing to the potential impact of a number of simmering trade conflicts.

"[These conflicts] represent a large risk to economic growth and could affect GDP expansion and people's well-being in the medium term," he warned.

hg/jd (dpa, AFP)