Germany's economic growth will probably slow in Q2 following unusually mild winter that fueled Q1 expansion of 0.8%; GDP growth in coming months will be driven largely by domestic demand: Bundesbank

Cindy Allen

BERLIN , May 19, 2014 (Thomson Reuters Corp.) – German economic growth will probably slow in the second quarter after an unusually mild winter boosted expansion in the first, the Bundesbank said on Monday, adding that domestic demand would provide the main pillar of support in the coming months.

Europe's largest economy, which expanded only moderately last year, grew by 0.8 percent between January and March, its fastest rate in three years thanks to strong domestic demand and mild weather.

The Bundesbank said the positive effect from the weather would likely dampen the seasonally-adjusted rate of gross domestic product (GDP) growth in the second quarter for mathematical reasons.

"GDP growth will nevertheless probably be relatively weak in the spring in seasonally and calendar-adjusted terms," the Bundesbank said in its monthly report.

It said the economic upturn in the coming months would be largely based on domestic demand while impetus from abroad would be "rather subdued".

It also said the potential for external disruption had "increased noticeably" of late due to economic risks in some emerging markets and significant geopolitical uncertainties in eastern Europe.

(Reporting by Michelle Martin; Editing by Madeline Chambers)

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