Germany reports sluggish first-quarter growth of 0.1%

Germany's economy barely grew in the first quarter of 2013 as exports and investment shrank, figures show.

But higher domestic consumption - thanks to rising wages - helped offset the declines in foreign trade and capital investment, raising hopes it will help drive a sustained recovery.

Gross domestic product rose 0.1% from the previous quarter, but contracted 1.4% compared with a year earlier.

The figure showed the economy narrowly avoided falling into a recession.

In the previous quarter, Germany's annual economic output shrank by 0.7%. A recession is defined as two consecutive quarters of economic contraction.

In the latest GDP data, which confirmed a preliminary estimate, only household spending was positive, growing 0.8%. Imports fell by 2.1% and exports dropped 1.8%.

"Germany's consumers ride to the rescue," said Christian Schulz, senior economist at Berenberg Bank.