Latest data confirms 0.3% growth for Germany in first quarter

Germany's economy grew in the first quarter despite the war with Iran, the Federal Statistical Office confirmed on Friday as it released its latest figures.

Gross domestic product (GDP) in Europe's largest economy rose 0.3% from the previous quarter, the office said, confirming an earlier estimate.

The main driver of growth at the start of the year was higher exports, which increased sharply by 3.3% in the first quarter, the statisticians said. Private and government consumption spending also rose 1.1%.

Many people have more money in their pockets due to higher wages, while government investment in defence and armaments is supporting the economy, the office said. 

At the same time, investment in equipment such as machinery, devices and vehicles fell 1.1%. Investment in construction declined even more sharply by 2.5%. This was mainly due to unusually cold weather in January and February which slowed building progress.

War fallout hits economy

However, the outlook for the coming quarters has worsened with the war with Iran, which began at the end of February and has pushed up energy and some raw material prices. 

Higher energy prices, especially at petrol stations, are weighing on consumers and businesses, curbing consumption and investment. 

The Economy Ministry and the central bank, the Bundesbank, expect a drag on the economy in the second quarter, with the Bundesbank forecasting no growth in the quarter. 

Economists across the board have been cutting their growth forecasts. On Thursday, the European Commission halved its growth forecast for Germany for 2026 to 0.6%. 

In 2025, Germany narrowly avoided a third consecutive year without growth with a modest GDP increase of 0.2%.