Expanding exports and domestic consumption pushed Germany’s economy — Europe’s biggest — to grow slightly faster than expected between April and June, preliminary data showed yesterday.
With a 0.4 percent increase in calendar and seasonally-adjusted terms, GDP grew slightly slower than the previous quarter’s 0.7 percent, a statement from federal statistics office Destatis said.
That was twice as fast as analysts surveyed by Factset had predicted.
“Compared with the previous quarter, positive impulses came from the trade surplus. Preliminary estimates showed exports increased compared with the first quarter of this year,” the statisticians said.
“Private consumption spending and state consumption spending also bolstered growth,” the statement said.
Compared with the same period last year, the economy showed growth of 3.1 percent — “stronger than at any time in the past five years,” Destatis said.
However, there were some weaker spots in the overall picture.
“Growth was slowed by weak net investment, especially in facilities and construction, where less was invested after a strong first quarter,” the statisticians said.
ING Diba bank’s Carsten Brzeski said “the current recovery is clearly running on its very last leg,” pointing to weak investments, which he said are unlikely to return to healthy levels given the shock of the UK’s vote to quit the EU, as well as fears of a wider global slowdown.
Domestic consumption alone without investment will not be able to maintain growth indefinitely, Brzeski said.
Yesterday’s data are only preliminary, with a full GDP reading and detailed breakdown to be published on Aug. 24.
Meanwhile, inflation in the German economy picked up slightly last month, final official data confirmed.
Germany’s national inflation yardstick, the consumer price index, grew by 0.4 percent, Destatis said.
The uptick was driven by rising food and service prices, but slowed as energy and clothing became cheaper.
Inflation in Germany remains well short of the target of just under 2 percent set by the European Central Bank.
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