(RTTNews) - German economic growth accelerated to a 12-year high in the first quarter of 2008, led by increased investment and pick up in consumer spending.

Thursday, preliminary data from the statistical office Destatis showed that German gross domestic product grew 1.5% quarter-on-quarter on price, seasonal and calendar adjustment in the first three months of the year. This was a significant improvement over the 0.3% expansion witnessed in the final quarter of last year. Economists had expected only 0.7% growth for the first quarter.

The Wiesbaden-based Destatis said, “Despite stronger load factors, the German economy proved to be very robust at the beginning of 2008″.

According to the statistical office, the major contribution to first quarter growth came from an increase in investment. Additionally, consumer spending also underpinned growth. Net exports contributed to growth only on a year-on-year basis.

Many analysts commented that a mild winter boosted growth in the first quarter. While some expect growth in the largest Eurozone economy to stagnate henceforth, some are seeing prospects of upwardly revising their forecasts for the full year. The euro strengthened after the release of the report.

The price-adjusted GDP was up 1.8% year-on-year in the first quarter. In the fourth quarter of 2007 it expanded 1.6% year-on-year. The calendar adjusted annual growth for the first quarter was 2.6%, rising from 1.8% in the fourth quarter.

Commenting on the data, Fr�d�rique Cerisier of BNP Paribas Economic Research said altogether, the preliminary data point to exceptionally strong growth in the first quarter. However, the economist pointed out that monthly hard data outline that supply and demand growth mainly took place in December and in January. Since then, they apparently stalled at the levels reached at the beginning of 2008.

Further, the BNP Paribas economist said given the importance of the rebound, stock building may thus have played an important role in growth, opening the door to adjustments in forthcoming quarters.

The Destatis is set to publish detailed data on May 27.

In a separate communiqu�, the Destatis announced that consumer price inflation slowed to 2.4% in April from 3.1% in March. The harmonized inflation was 2.6% in April, down from 3.3% in March.

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