German gross domestic product unexpectedly grew in January-March, making it the fourth consecutive quarter of expansion in Europe's largest economy, the Federal Statistics Office said.
Preliminary data showed GDP grew 0.2 per cent quarter-on-quarter, beating a consensus forecast for an unchanged reading, as firmer equipment investment and exports outweighed weaker construction and private consumption.
Fourth-quarter growth was revised upwards to also show growth of 0.2 per cent, after being previously reported as flat.
"Despite the harsh winter, the German economy has surprised us by growing. In that sense it's performing much better than the euro zone," said economist Joerg Kraemer at Commerzbank.
"Now that the €750 billion emergency aid package has prevented the sort of shock we had after Lehman Brothers went bust, the German economy should continue outperforming the rest of the euro zone in coming months with its strong export base," Mr Kraemer said.
The rescue package, cobbled together by the European Union and IMF over the weekend, is aimed at preventing Greece's debt crisis from spreading to other weak euro zone members, which could derail regional economic growth and possibly spark another global credit crunch.
Foreign trade is expected to play a major role in the recovery in Germany, which was the world's biggest exporter of goods from 2003 to 2008, before being overtaken by China.
Data this Monday showed that German exports surged at their fastest rate in nearly 18 years in March, surpassing even the most optimistic forecast.
Year-on-year, the economy grew by 1.7 per cent in the first quarter, the data showed today, surpassing the Reuters consensus forecast for 1.2 per cent expansion. This followed a 1.5 per cent drop in the October-December period.
Germany exited its deepest post-war recession in the second quarter of last year but the recovery slowed in the winter as harsh weather disrupted business activity.
Recent economic indicators have beaten forecasts, however, and pointed to the recovery picking up again. Data last week showed industrial output and orders surging in March.
Reuters