German Economy Grows at Better than Expected Rate

Strong foreign trade and buoyant consumption drove Germany's economy to better-than-expected growth in the second quarter, federal statistics office Destatis said on Wednesday.

    Gross domestic product (GDP) grew by 0.4% between April and June, adjusted for seasonal, calendar and price effects, twice as fast as analysts surveyed by Factset predicted.

    However, the final figure, which confirmed a preliminary Destatis reading earlier in August, represented a slow-down from the unexpectedly strong 0.7% expansion in the first quarter. "Compared with the previous quarter, the positive impulses above all came from foreign trade," Destatis said in a statement. 

    According to preliminary estimates, exports of goods and services increased by 1.2% between April and June, while imports fell by 0.1%. Overall, the data showed "mixed signals" in the German economy. 

    Households increased spending by 0.2% and the state by 0.6% compared with the previous quarter. But business investment in capital goods fell by 2.4% and in construction by 1.6%. 

    Looking back at the previous year, the economy was 1.8% larger between April and June than the same period in 2015, adjusting for price and calendar effects, a slightly slower growth rate than the first quarter's 1.9%.