Ger­man eco­nomic re­cov­ery gath­ers mod­est pace in Q2

The China Post - - WORLD BUSINESS -

Growth of the Ger­man econ­omy, Europe’s big­gest, picked up marginally in the sec­ond quar­ter of 2015, driven by the weaker euro and healthy con­sumer spend­ing, of­fi­cial data showed on Fri­day.

Ger­man gross do­mes­tic prod­uct (GDP) ex­panded by 0.4 per­cent in the pe­riod from April to June, up from 0.3 per­cent in the first quar­ter, the fed­eral sta­tis­tics of­fice Des­tatis said in a flash es­ti­mate.

An­a­lysts had been pro­ject­ing marginally stronger growth of 0.5 per­cent for the sec­ond quar­ter.

“The Ger­man econ­omy con­tin­ued along its pos­i­tive growth path,” the statis­ti­cians said.

“Pos­i­tive im­pulses came pri­mar­ily from for­eign trade. Ex­ports grew a lot faster than im­ports thanks to the weak euro, with goods ex­ports in par­tic­u­lar grow­ing strongly.”

But con­sumer spend­ing and gov­ern- ment spend­ing also in­creased.

Weak in­vest­ment, on the other hand, weighed on growth, Des­tatis added.

On a 12-month ba­sis, GDP growth stood at 1.6 per­cent in the sec­ond quar­ter com­pared with 1.2 per­cent in the first quar­ter, it said.

“Over­all, the data show that, de­spite the un­cer­tainty sur­round­ing Greece’s con­tin­ued mem­ber­ship in the euro, the Ger­man econ­omy man­aged to gain some mo­men­tum in the spring,” said Bay­ernLB economist Ste­fan Ki­par.

“The Ger­man econ­omy is on a broad foot­ing and is be­ing driven by both do­mes­tic de­mand and pos­i­tive for­eign trade,” he said.

And given the con­tin­ued low oil prices and eco­nomic re­cov­ery in the United States and the euro area, “the out­look for com­ing quar­ters re­mains pos­i­tive,” Ki­par noted.

ING DiBa economist Carsten Brzeski said that “nei­ther Greece nor China were able to stop the Ger­man econ­omy.”

A full break­down of the dif­fer­ent GDP com­po­nents would only be pub­lished at the end of Au­gust.

“But avail­able monthly data ... in­di­cate that growth was driven by ex­ports and do­mes­tic con­sump­tion,” Brzeski said.

“The eu­ro­zone’s eco­nomic pow­er­house has suc­cess­fully de­fied ex­ter­nal tur­bu­lences. De­spite the Greek cri­sis, the Chi­nese stock mar­ket col­lapse and growth slow­down fears as well as con­tin­ued weak­ness in many eu­ro­zone coun­tries,” Ger­man growth av­er­aged 0.4 per­cent in last four quar­ters, he said.

“Nev­er­the­less, not all that glit­ters is gold,” Brzeski cau­tioned, ar­gu­ing that record low in­ter­est rates, low energy prices and the weak euro should have given the Ger­man econ­omy an even stronger boost.

“Nor­mally, such a cock­tail of strong ex­ter­nal steroids should have given wings to the econ­omy. This is not the case,” he said.

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