German economy grows at better than expected rate

AFP, FRANKFURT: Strong foreign trade and buoyant consumption drove Germany’s economy, Europe’s largest, to better-than-expected growth in the second quarter, federal statistics office Destatis said yesterday. 
Gross domestic product (GDP) grew by 0.4 per cent between April and June, adjusted for seasonal, calendar and price effects—twice as fast as analysts surveyed by Factset predicted. 
However, the final figure, which confirmed a preliminary Destatis reading earlier in August, represented a slow-down from the unexpectedly strong 0.7-per cent expansion in the first quarter.
“Compared with the previous quarter, the positive impulses above all came from foreign trade,” Destatis said in a statement.
According to preliminary estimates, exports of goods and services increased by 1.2 per cent between April and June, while imports fell by 0.1 percent.
Overall, the data showed “mixed signals” in the German economy.
Households increased spending by 0.2 per cent and the state by 0.6 per cent compared with the previous quarter.
But business investment in capital goods fell by 2.4 per cent and in construction by 1.6 percent.
Looking back at the previous year, the economy was 1.8 per cent larger between April and June than the same period in 2015, adjusting for price and calendar effects—a slightly slower growth rate than the first quarter’s 1.9 percent.
In the coming quarters, “private consumption should remain an important growth driver on the back of low inflation, low interest rates, low unemployment and higher wages,” analyst Carsten Brzeski of ING Diba bank said, while Germany’s refugee crisis will continue to bolster state spending.
Investment remains “the economy’s Achilles heel,” he noted, adding that Chancellor Angela Merkel must produce “a clear vision for Europe” with other EU leaders to reassure investors in Germany.

German economy grows at better than expected rate

AFP, FRANKFURT: Strong foreign trade and buoyant consumption drove Germanys economy, Europes largest, to better-than-expected growth in the second quarter, federal statistics office Destatis said yesterday. Gross domestic product (GDP) grew by 0.4 per cent between April and June, adjustedfor seasonal, calendar and price effectstwice as fast as analysts surveyed by Factset predicted. However, the final figure, which confirmed a preliminary Destatis reading earlier in August, represented a slow-down from the unexpectedly strong 0.7-per cent expansion in the first quarter. Compared with the previous quarter, the positive impulses above all came from foreign trade, Destatis said in a statement. According to preliminary estimates, exports of goods and services increased by 1.2 per cent between April and June, while imports fell by 0.1 percent. Overall, the data showed mixed signals in the German economy. Households increased spending by 0.2 per cent and the state by 0.6 per cent compared with the previous quarter. But business investment in capital goods fell by 2.4 per cent and in construction by 1.6 percent. Looking back at the previous year, the economy was 1.8 per cent larger between April and June than the same period in 2015, adjusting for price and calendar effectsa slightly slower growth rate than the first quarters 1.9 percent. In the coming quarters, private consumption should remain an important growth driver on the back of low inflation, low interest rates, low unemployment and higher wages, analyst Carsten Brzeski of ING Diba bank said, while Germanys refugee crisis will continue to bolster state spending. Investment remains the economys Achilles heel, he noted, adding that Chancellor Angela Merkel must produce a clear vision for Europe with other EU leaders to reassure investors in Germany.