Germany confirmed its status as the powerhouse of Europe in the first quarter, as its economy grew by a mighty 0.7 per cent in the first three months of the year.
The German statistics agency this morning confirmed that stronger domestic demand, buoyed by higher levels of employment, helped Europe's largest economy to more than double its rate of growth from the 0.3 per cent clocked up in the last quarter of 2015.
"The German economy gained pace at the start of this year," a statement from Destatis, the official Germany stats body, said matter-of-factly.
The expansion of 0.7 per cent was the strongest for two years, but economy watchers were unconvinced that Germany can sustain such impressive expansion. Trading Economics believes growth will fall to 0.4 per cent in the second quarter. The European Commission have pencilled in a 1.6 per cent expansion for the year, while the German government is forecasting growth of 1.7 per cent.
If expectations are not revised, it would mean Germany achieved almost half of its annual growth in the first three months of the year.
Separate figures, also released this morning, showed Germany slipped back into deflation in April, with the consumer prices index (CPI) measure of inflation falling to minus 0.1 per cent from the 0.3 per cent registered last month. Cheaper transport, housing and communication costs helped offset rising food and clothing costs, according to Destatis.
While experiencing an inflation rate of zero per cent on a few occasions in recent months, Germany has not recorded a negative rate since January 2015.
The latest estimates for GDP growth across the Eurozone will be published later this morning. Earlier calculations, which did not provide details on Germany's growth – the most important piece of the puzzle – said that the single currency bloc grew by 0.6 per cent in the first quarter, faster than both the UK and the US.