By Maria Martinez
BERLIN (Reuters) -The German economy grew significantly more in the first quarter than previously estimated due to good economic developments in March, according to a second estimate published on Friday.
The economy grew by 0.4% in the first quarter of 2025 compared with the previous quarter, the statistics office said, revising a preliminary reading of 0.2%.
Germany’s sluggish economy has not grown at that pace since the third quarter of 2022, when it expanded by 0.6%.
Economic growth was driven by trade and consumption.
Manufacturing output and exports registered stronger growth than initially assumed in March, said Ruth Brand, president of the statistics office.
Exports rose by 3.2% compared to the previous quarter, as U.S. importers brought their purchases forward in anticipation of tariffs.
Household consumption saw stronger growth than in the preceding quarters, rising by 0.5%.
By contrast, government spending declined by 0.3% in the first quarter compared to the previous one. According to the statistics office, this is due to the provisional budget.
Germany had contracted in the final quarter of last year by 0.2%, reigniting recession fears. A recession is defined as two consecutive quarters of negative growth.
Germany had also been expected to be badly affected by tariffs due to its export-oriented economy. The U.S. was Germany’s biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($286.40 billion).
After former chancellor Olaf Scholz’s coalition collapsed in November, the last government ran out of time to pass the 2025 budget. Germany has instead been operating on a provisional budget since the start of the year.
Germany’s new finance minister has begun intensive preparations for the 2025 and 2026 budgets.
($1 = 0.8834 euros)
(Reporting by Friederike Heine and Maria Martinez, editing by Thomas Seythal and Aidan Lewis)
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