The German economy, the biggest in the 12 country euro zone, grew faster than it has done in four years in the first three months of 2005, driven by buoyant foreign demand for German-made goods, preliminary data showed today.

Gross domestic product (GDP) expanded by 1% in the three months from January to March, compared with the preceding three months, the federal statistics office, Destatis, calculated in a statement.

It was the fastest quarterly rate of growth since the first quarter of 2001, the statisticians said.

On a 12-month basis, however, GDP stagnated in the first quarter of 2005 compared with the corresponding period of 2004, largely because there were two fewer working days available this year.

Adjusted for that calendar effect, the German economy also expanded by a 'good 1%' year-on-year in the January-to-March period, Destatis said.

Destatis said that first-quarter growth was driven 'exclusively' by buoyant foreign demand for goods made in Germany. Exports rose strongly and imports declined so that the trade surplus showed a sharp increase overall, the statistics office said.

'By contrast, domestic demand declined on the whole, with only investment in equipment increasing,' the statement said. 

The first-quarter GDP figures were much better than expected - analysts had been pencilling in more modest growth of 0.5% following the shallow recession that the German economy slipped into in the second half of last year.

In other news today Germany's lower house of parliament overwhelmingly backed the EU constitution this morning. More than the required two-thirds of Bundestag members voted in favour of the charter which is designed to streamline decisions in the bloc after enlargement.

The upper house, the Bundesrat, is expected to complete German ratification with a vote on 27 May , just days before French and Dutch referendums on the constitution.