0.3 percent plus German economy grows thanks to rising exports
The German economy grew in the first quarter. Gross domestic product (GDP) increased by 0.3 percent compared to the previous quarter, as announced by the Federal Statistical Office on Friday, confirming its previous forecast.
22.05.2026, 09:47
22.05.2026, 10:32
SDA
"Following the slight growth at the end of 2025, the German economy has also made a positive start to 2026," said Ruth Brand, President of the Federal Statistical Office.
The main reason for the growth at the start of the year was higher exports, which increased significantly by 3.3% in the first quarter, according to the statisticians. Exports of chemical and pharmaceutical products as well as metals contributed to this growth.
As in the previous quarters, consumer spending also increased, rising by 0.4% compared to the previous quarter. Government consumer spending grew by 1.1%.
At the same time, investments in equipment such as machinery, appliances and vehicles fell (-1.1%). Investments in buildings fell even more sharply by 2.5 percent. This was mainly due to the unusually cold weather in January and February, which slowed down construction progress.
Consequences of war hit the economy
However, the Iran war, which began at the end of February, has clouded the outlook. Economists expect that the German economy, which is dependent on raw material imports, will have to deal with the consequences of the conflict, which has still not been resolved, for longer.
As the Strait of Hormuz, which is important for global trade, is largely closed, crude oil prices have shot up. Higher energy prices, especially at petrol stations, are a burden on consumers and companies, which is slowing down consumption and investment. The mood in the German economy has plummeted.
Economic slowdown expected
The Federal Ministry for Economic Affairs and the Bundesbank are therefore expecting the economy to be dampened in the current second quarter. "Rising prices, supply chain problems and uncertainty are weighing on sentiment in companies and private households," the ministry recently wrote. "But even after the situation eases, the consequences of energy and commodity prices and supply chains are likely to be felt for some time to come."
The Bundesbank expects stagnation in the period from April to June: "In the second quarter, the effects of the war in the Middle East are likely to have a broader and more noticeable impact on the German economy," it wrote.
Economists have lowered their economic forecasts by the dozen. It was only on Thursday that the EU Commission halved its growth forecast for Germany to 0.6 percent in 2026 due to high energy prices as a result of the Iran war. The German government is still forecasting growth of 0.5 percent. In 2025, Germany had already narrowly missed a third consecutive year without growth with a mini increase of 0.2 percent.
