FRANKFURT, Feb 19 (Reuters) - The German economy continues to recover, although expansion in the first quarter will be weak, with a pickup expected only from the spring, the Bundesbank said in a
Bundesbank Sees Weak Q1 for Germany, With Growth Picking Up From Spring
Bundesbank’s Q1 Assessment and Outlook
FRANKFURT, Feb 19 (Reuters) - The German economy continues to recover, although expansion in the first quarter will be weak, with a pickup expected only from the spring, the Bundesbank said in a monthly economic report on Thursday.
Labour market and savings
Government spending impact
Drivers of a Later Rebound
Germany, Europe's largest economy, has been stagnant for the past three years but a government spending spree, a strong labour market and pent-up household savings are fuelling optimism for a rebound.
"The economy is expected to continue its recovery in the first quarter, albeit with weak momentum," the Bundesbank said. "From spring onwards, the German economy is expected to grow more dynamically, driven primarily by fiscal stimulus."
Soft private consumption
Construction hit by weather
Near‑Term Headwinds
Construction is likely to take a hit from poor weather in the quarter and private consumption is unlikely to remain at an elevated level, the central bank said.
Export competitiveness risk
Defence and infrastructure demand
Industry Orders and Exports
While industry has seen some large orders, they are likely related to higher government spending on defence and infrastructure, and the sector's competitiveness on export markets remains relatively weak.
Below 1% projection
Second‑half skew
Full‑Year Growth Guidance
The Bundesbank earlier forecast German economic growth below 1% this year with most of that growth skewed towards the second half of the year.
(Reporting by Balazs Koranyi; Editing by Anil D'Silva)
