Wed, Aug 15, 2012 - Page 15 News List

German, French GDPs beat analysts’ estimates

PLEASANT SURPRISE:Despite the positive turn in the second quarter, analysts warn that the two countries could still falter as the eurozone debt crisis deepens

AFP, FRANKFURT and PARIS

Container ships are pictured at the Burchard quay in Hamburg, Germany, on Monday. The German economy rose 0.3 percent last quarter, data showed.

Photo: EPA

The Germany economy grew by a higher-than-expected 0.3 percent in the second quarter, buoyed by rising exports and robust domestic demand, while France maintained flat growth, beating expectations of a contraction, data showed yesterday.

German GDP growth was higher than analysts’ forecasts of growth of just 0.2 percent for the period from April to June.

Nevertheless, growth was still slower than the 0.5 percent seen in the first quarter, as Europe’s biggest economy also began to feel the effects of the long-running debt crisis that has pushed much of Europe into recession, according to the data published by the national statistics office Destatis.

“Positive impulses came from both consumer spending and from net foreign trade,” Destatis said in a statement.

“According to preliminary data, exports grew somewhat faster than imports. Furthermore, both private and public spending was higher than in the preceding quarter, helping to offset a decline in investment,” it said.

While many of Germany’s eurozone partners are teetering on the edge of — or already in — recession, the bloc’s economic powerhouse is continuing to expand, thanks largely to deep structural reforms implemented a number of years ago.

However, with much of Europe in the doldrums, German exports are also beginning to falter and some analysts believe the economy as a whole could soon grind to a halt.

Exports, which grew 4.1 percent in May, fell 1.5 percent in June, hit by falling shipments to the other 16 countries of the eurozone, according to the latest data released last week. Imports — a barometer of domestic demand — were down, too, falling by 2.9 percent.

Meanwhile, France’s economy managed zero growth in the second quarter, data showed yesterday, beating expectations it would begin a slide into recession.

In its first flash estimate for the second quarter, the national statistics institute INSEE said that French GDP was unchanged.

That confounded expectations by many economists — including the Bank of France — that slowdown plaguing much of the eurozone would push France toward recession.

French Finance Minister Pierre Moscovici called the result “very weak,” but held to the government’s forecast for 0.3 percent growth this year.

Moscovici said on Europe 1 radio that zero growth “wasn’t great,” but “at the same time France is not in recession” unlike “most of our partners” in the EU such as Spain, Italy and Britain.

France emerged from its last recession in the spring of 2009, but the economy has since struggled to gain momentum as the eurozone debt crisis has intensified, posting zero growth for the last three quarters.

The French construction and automobile industries have been hit particularly hard. New housing starts in the second quarter were 14 percent below last year’s levels, while car sales were down 7 percent last month on a year earlier.

With these job-intensive sectors struggling, unemployment has spiked.

Latest figures put the jobless total at nearly 10 percent of the work force, with a further 5 percent working fewer hours than they would like.

Given the deepening of the eurozone crisis in the second quarter, “flat GDP shows resilience in the second quarter,” Berenberg Bank senior economist Christian Schulz said.

“Despite the apparent resilience of French GDP, some worrying trends persist,” he added.

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