Economic growth in Germany, Europe's largest economy, accelerated to the fastest pace in 12 years in the first quarter as companies stepped up spending on machinery and construction.
Gross domestic product rose 1.5 per cent from the fourth quarter, when it increased 0.3 per cent, the Federal Statistics Office in Wiesbaden said today.
Germany's resilience is giving the European Central Bank room to leave interest rates at a six-year high to fight inflation. By contrast, the US Federal Reserve has cut rates seven times to stave off a possible recession.
Evidence suggests German growth was boosted by a milder-than-usual winter and has since slowed. Higher credit costs, faster inflation and a stronger euro are eroding consumer spending and export competitiveness.
The statistics office said investment was the main driver of first-quarter growth and consumer spending also contributed. While exports aided annual growth, they didn't contribute to expansion in the quarter.
In the year, the economy grew 2.6 per cent when adjusted for the number of working days, the office said. It is due to publish a detailed breakdown of the data on May 27th. The European Union's statistics office in Luxembourg will publish first-quarter growth figures for the euro area at 11am.