Germany "booms" in the first quarter - Economy grew twice as much as expectations
The German economy grew significantly more in the first quarter of this year, compared to previous estimates, due to positive economic developments in March.
The economy grew by 0.4% in the first quarter of 2025, compared with the previous three months, the statistics office said, revising a previous estimate of 0.2%. Such an expansion has not been recorded since the third quarter of 2022, when it grew by 0.6%.
Economic growth was driven by trade and consumption. Production and exports both rose above estimates in March. Exports rose 3.2% from the previous quarter as U.S. importers rushed to buy to avoid tariffs. Household consumption expanded more strongly than in previous quarters, rising 0.5%.
In contrast, government spending fell by 0.3% in the first three months. According to the statistics office, this was due to the temporary budget. Germany contracted in the last quarter of last year by 0.2%, reviving fears of a recession. A recession is defined as two consecutive quarters of negative growth.
Berlin was also expected to be significantly affected by the tariffs because of its export-oriented economy. The United States was Germany's largest trading partner in 2024 with bilateral goods trade totaling 253 billion euros.
After former Chancellor Olaf Scholz's coalition collapsed in November, the last government did not have time to approve the 2025 budget. Instead, Germany has been operating with a temporary budget since the beginning of the year.
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