German growth expected to slow

Frankfurt: The German Bundesbank said Europe’s largest economy will probably lose some growth momentum over the coming months after an “explosive” start to the year.

“Growth is likely to ease somewhat in the foreseeable future,” the Frankfurt-based Bundesbank said in its monthly bulletin.

The economy’s 1.5% growth rate in the first quarter from the previous quarter “considerably overstates the underlying economic momentum”.

“Output growth was clearly lifted during the reporting period by backloading and catching-up effects.”

Germany’s economy is powering the euro region’s expansion after expanding a record 3.6% in 2010. Companies are stepping up spending and hiring to meet booming export orders.

Still, the central bank called faster inflation among risks to economic growth, saying monetary policy is still “extremely expansionary”.


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