Germany's economy saw unexpected growth of 0.2% from January to March, according to Destatis, averting a recession after a contraction late last year. Driven by increased consumption and investment, this growth provides a significant boost for incoming Chancellor Friedrich Merz. However, the positive outlook may be hampered by potential repercussions from US tariffs that could negatively impact growth later in the year. While analysts are cautiously optimistic, many warn that long-term recovery remains uncertain in light of geopolitical and economic pressures.
Germany's economy unexpectedly grew 0.2% in the first quarter, potentially easing the transition for new Chancellor Friedrich Merz amidst ongoing concerns about US tariffs.
The reported GDP growth offers a brief reprieve, as economists caution that looming tariffs from the US are expected to hinder Germany's recovery later in the year.
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