Germany’s economy moved up a gear in the second quarter following a weak start to the year, official data confirmed Wednesday, making it the fastest growing of the world’s largest industrialized nations.
However, economists warn it may be difficult to sustain this brisk growth momentum in coming quarters, since at least some of the activity recorded in the three months to June had been postponed from the first quarter, when a severe cold spell depressed industrial activity and construction.
Germany’s gross domestic product, the broadest measure of goods and services produced across the economy, swelled 0.7% in the second quarter from the preceding period, in line with economists’ forecasts. That equals annualized growth of 2.9%, the statistics office said. By comparison, the U.S. economy expanded by an annualized 1.7% in the second quarter, while Japan’s growth rate eased to 2.6%.
Strong growth in Germany, the euro-zone’s largest economy, should help to pull the currency area out of its longest post-war slump. Eurostat, the European Union’s statistics agency, will publish its preliminary estimate at 0900 GMT Wednesday, and analysts expect it to record GDP growth of 0.2% in the second quarter, following six straight quarters of contraction.
The data should also give a boost to Angela Merkel’s conservative coalition, which already has a comfortable lead in recent opinion polls. Germany’s chancellor later Wednesday will officially launch her election campaign, which will see her deliver almost 60 campaign speeches ahead of Sept. 22 polls.
Germany’s statistics office said growth in the second quarter was driven by domestic demand, as both private consumption and public spending increased from the first quarter. “Investment picked up notably too, which was partly due to weather-related catch-up effects following an unusually long and cold winter,” the statistics office said. Net trade also contributed to second-quarter growth, as exports–albeit still subdued–increased more than imports.
The statistics office also revised down first-quarter GDP, but lifted its fourth-quarter estimate. German GDP was flat in the first quarter and declined by a quarterly rate of 0.5% in the last three months of 2012. It previously pegged quarterly GDP rates at +0.1% and -0.7% respectively. The data are inflation-adjusted and take account of seasonal swings as well as the number of working days in each quarter.
Source: Marketwatch
