German economic growth picks up, nation’s finances in the black: data
German economic growth picked up in the second quarter of 2015, and the public finances of Europe’s economic powerhouse were firmly in the black in the first half, data showed on Tuesday.
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, confirming a flash estimate released earlier this month.
At the same time, Destatis calculated that Germany’s finances were firmly in the black, with the federal, regional, municipal and welfare budgets running up a combined surplus of 21.1 billion euros (US$24.4 billion) in the period from January to June.
That is equivalent to 1.4 percent of GDP, Destatis said.
Germany’s public finances “continued to profit from the favorable employment situation and positive growth, as well as moderate spending,” Destatis said.
But the statisticians warned against extrapolating the first-half figures on to the year as a whole, as the budget surpluses tended to be lower in the second half of the year.
Under EU rules, member states are not allowed to run up budget deficits of more than 3.0 percent of overall output, but Germany’s finances were in surplus last year.
Turning to the second-quarter GDP data, Destatis said that “positive impulses came primarily from foreign trade.”
Exports were up
2.2 percent quarter-on-quarter and imports rose by 0.8 percent, which meant the resulting trade surplus — the difference between exports and imports — added 0.7 percentage point to growth, Destatis calculated.
That was “the biggest growth engine in the second quarter,” it said.
On the side of domestic demand, the signals were more mixed.
While private households marginally increased spending by 0.2 percent and public sector spending rose by 0.3 percent, investment in plant and equipment declined by 0.4 percent.
“All in all, domestic demand decreased slightly in the second quarter, knocking 0.3 percentage point off the overall growth rate,” Destatis said.