German GDP growth slowed more than expected in the second quarter, weighed by a negative trade balance, flagging consumption and weak construction investment, the statistics office said.
Growth dropped to 0.1 percent in seasonally adjusted terms, from a revised 1.3 percent in the first three months of the year, the preliminary data released yesterday showed, leading some economists to rethink other forecasts.
With French figures last week showing that its economy stagnated in the second quarter, the poor German numbers suggest the 0.3 percent forecast for eurozone growth could well be optimistic.
“This is a serious disappointment,” Joerg Lueschow from West LB said. “Germany, too, cannot evade global slowdown ... This does not provide any positive signs for eurozone GDP. We cannot expect more than stagnation now.”
The reading, which compared with a Reuters consensus forecast for a 0.5 percent expansion, was the weakest since the first quarter of 2009, when Germany was still exiting the financial crisis and GDP contracted.
Quarterly growth had been initially been reported at 1.5 percent for the first quarter. The statistics office said that data dating back to 1991 had been revised as part of a wide-reaching revision conducted every five years.
The data should also add worry to already fragile markets ahead of a meeting later yesterday between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris.
Germany, Europe’s largest economy, has been a star performer in the industrialized world since the end of the 2008 financial crisis and a sharp slowdown in German growth would have repercussions elsewhere in the eurozone.
“While German politicians are currently racking their brains on the pros and cons of common euro bonds, the luxury of having an economy running at ‘wonder’ speed is fading away,” ING economist Carsten Brzeski said.
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