2018.05.1600:28:00UTC+00Germany’s Growth Cooled in the First Quarter

Germany's economy cooled sharply in the first quarter amid a fall in government spending and weak exports—a sign that a stronger euro and global tensions are beginning to leave a mark on the German economy.

Germany's annualized growth rate slowed to 1.2 percent from 2.5 percent in the fourth quarter of 2016, the Federal Statistical Office said. Europe's biggest economy expanded by 0.3 percent in the first three months, the slowest rate since the third quarter of 2016, preliminary data showed.

Still, it marked the 15th straight quarter of growth, the longest period of uninterrupted growth since German reunification.

The statistics office said positive contributions in the first quarter came mainly from domestic demand while trade was weak.

Trade powers the German economy, with exports accounting for roughly 50 percent of GDP. The country has a huge trade surplus with the rest of the world, which has long been a source of irritation for President Donald Trump.

German exporters have also been hit by a rise in the euro, which makes their products more expensive in overseas markets. The euro reached $1.26 in February, its highest level since 2014, but has since fallen back to $1.18.

The government said it expects the economy to rebound in the second quarter due to full order books and high employment. Berlin forecasts 2.3 percent growth this year.