German growth to lose momentum in spring: German central bank

The German economy would lose its growth momentum but remain solid in the second quarter, said German central bank on Tuesday.

"The Bundesbank's economists expect the German economy to lose traction in spring," said the central bank in its monthly report.

In the first quarter of 2016, Europe's biggest economy expanded by 0.7 percent quarter on quarter. It was the strongest growth in recent two years and mainly due to buoyant domestic demand, according to German federal statistics office.

The central bank expected "the solid underlying cyclical trend" of the economy to remain intact in the second quarter.

"The consistently upbeat labor market, rising income expectations along with stable prices will keep consumption activity buoyant," the bank said, "however, the unlikely prospect of a further drop in oil prices leads them to believe that the sizable purchasing power gains in the past two quarters will dwindle." Endit