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Zum Jahresbeginn noch kein Aufschwung

Press Release of May 14, 2002

At the beginning of this year, economic growth once again failed to exhibit any dynamism. Real gross domestic product turned out to be stagnant (-0.1%) compared to the previous quarter. This was largely due to a weak domestic demand; but above all to heavily declining investments in new equipment. Although import figures decreased, higher export rates prevented a further decline in economic growth. Compared to the previous quarter, retail prices experienced a slight increase of 0.7% during the first quarter of this year. This can be attributed to an increase in taxes that took effect at the beginning of this year as well as to an increase in prices, which mainly took place in the consumer sector (i.e. restaurants or personal services); the introduction of the Euro was largely responsible for this price increase, although there was also a upward movement in the price of fruit and vegetables in January.
Yet economic trends are expected to pick up considerably during the second quarter of this year. Indicators, however, do not suggest the spasmodic upward movement which would normally characterise a nascent upswing. The trend for incoming orders from abroad leads us to believe that exports will have a strong impact on economic output in the months to come. The world-wide economic upswing, which started in the USA, will also be decisive in this context. The poor rate for domestic incoming orders, however, shows that external economic impulses are yet to have an effect on domestic operations. Data on the labour market for April - the seasonally adjusted number of unemployed experienced a slight increase of 6000 - are in the main negative. This means a noticeable increase in private households' expenditure on consumption is highly unlikely. Whether or not current collective wage negotiations will have a noticeable effect on results for the second quarter depends on the duration of the negotiations.
If exports increase to the extent indicated by the inflow of new orders, real gross domestic product could increase by 0.5% in the second quarter of 2002; this would tally with an annual growth rate of almost 2%. This would also exceed the previous year's rate by almost 1% - a development that the DIW Berlin forecasted at the beginning of this year.