German GDP grew 0.5% in seasonally, price and calendar-adjusted terms in the first quarter compared with the fourth quarter of last year, according to preliminary figures from the Federal Statistics Office.
First-quarter GDP was up 3.3% year-on-year on an unadjusted basis and was 3.6% higher when adjusted for calendar effects.
Economists polled by Thomson Financial News had forecast an adjusted quarter-on-quarter increase of 0.3% and adjusted year-on-year growth of 3.2%.
"First-quarter economic growth was supported primarily by continued lively investment activity," the statistics office said in its statement.
"In comparison, consumer spending clearly slowed economic growth, which should be seen as related to the increase in value-added tax at the beginning of the year." The German government raised value-added tax -- a form of sales tax -- to 19% from 16% from January 1, a move widely seen as cutting into consumers' disposable incomes.
The statistics office revised upward its previous figure for GDP growth in the fourth quarter of 2006 to 1.0% from 0.9%. Second-quarter growth remained unchanged at 1.2% and third-quarter growth was unchanged at 0.8%.
Final GDP figures are scheduled to be released on May 24.