German Growth 0.2 Percent in First Quarter

Germany recorded growth of just over 0.2 percent in the first quarter of 2005, owing mainly to its export strength, but future prospects have worsened slightly, the Bundesbank said on Monday. "Gross domestic product rose slightly in the first quarter of 2005, in real terms and in seasonally adjusted terms, and more than compensated for the last quarter of 2004," when GDP fell 0.2 percent, the German central bank said in its monthly report for April. "The rise in growth is once again explained by external demand, with exports rising greater than imports in the first two months." However internal demand, traditionally the weak point of the German economy, remained disappointing, the Bundesbank added. DIW, one of Germany's leading economic research institutes, is forecasting that GDP increased by 0.7 percent in the first quarter on the back of strong performances from the manufacturing and retail sectors. But despite the German economy returning to positive growth, the Bundesbank said "future prospects had worsened slightly," pointing to the fact that industrial orders and production had decreased in February compared with January.