Published: Thu, August 17, 2017
Money | By Oscar Reynolds

German growth slows slightly in second quarter

German growth slows slightly in second quarter

The economy is forecast to grow 0.7 percent sequentially in the second quarter, following a 0.6 percent rise in the first quarter. A growth rate of 0.6% q/q is expected for the 19-country currency bloc.

Alexander Krueger, an economist at Bankhaus Lampe, said: "The German economy is proving its staying power, the upswing continues".

The positives were domestic demand as well as government investment and private consumption.

"The development of foreign trade, however, had a downward effect on growth because the price-adjusted quarter-on-quarter increase in imports was considerably larger than that of exports", it added.

"Germany's economic success story goes on and on and on", said Carsten Brzeski of ING Diba bank.

In addition, government spending on refugee immigration fueled the expansion, while capital spending by businesses also increased.

"The same holds for the export sector, where a stronger euro, weaker-than-expected USA growth and Brexit uncertainty could take some wind out of the sails without bringing exports to a halt", Brzeski said.

Output price inflation is seen at 3.1 percent in July versus 3.3 percent in June.

Destatis also revised upwards its growth estimate for the first quarter of the year to 0.7% from the initial estimate of 0.6%.

"With (Other OTC: WWTH - news) today's strong growth data, it will be hard for any opposition party to pick out the economy as a main theme for the final stage of the election campaign", said Brzeski.

The German economy, Europe's largest, continued its strong performance in the second quarter with gross domestic product growing 0.6 percent over the previous quarter. The Spanish economy keeps powering ahead, however, with a growth rate of 0.9 percent in the April-June quarter.

The euro fell 0.2 per cent against the dollar to $1.1757.

Like this: