Germany's Q1 GDP Grows 0.4%... Surge in Exports Before US Tariffs

Strong Manufacturing and Export Performance
Increase in Pharmaceutical and Automobile Exports

Germany's Federal Statistical Office announced on May 23 (local time) that the country's gross domestic product (GDP) grew by 0.4% in the first quarter of this year compared to the previous quarter. This figure is double the preliminary estimate of 0.2% released at the end of last month.

The statistical office stated that manufacturing output and exports in March performed better than expected, with significant increases in exports of pharmaceuticals and automobiles, which are major export items to the U.S. market. This is analyzed as being due to a surge in export volumes just before U.S. President Donald Trump imposed tariffs last month.

In the first quarter, Germany recorded a trade surplus of 7.8 billion euros (12.1 trillion won) in automobiles and auto parts, and 4.2 billion euros (6.5 trillion won) in pharmaceuticals with the United States. The surplus in automobiles and parts increased by 26% compared to the first quarter of last year.

The quarter-on-quarter economic growth rate was the highest in ten quarters since the 0.6% recorded in the third quarter of 2022. It also exceeded the average for European Union (EU) member states by 0.1%. Previously, the German economy failed to maintain its recovery after the COVID-19 pandemic, recording growth rates of -0.3% in 2023 and -0.2% last year, repeatedly experiencing recession.

However, the German government is not ruling out the possibility that the German economy may experience negative growth for a third consecutive year. Both the German Ministry of Economic Affairs and the German Council of Economic Experts, a federal government advisory body, have projected this year's economic growth rate at 0.0%.