Germany: German economy decelerates but grows faster than expected in Q2
August 12, 2016
Europe’s largest economy grew at a slower pace in the second quarter of this year, according to a preliminary estimate released by the Federal Statistics Office (Destatis) on 12 August. In Q2, German GDP rose a seasonally-adjusted 0.4% over the previous quarter, which marked a deceleration over the strong 0.7% expansion recorded in Q1. Nevertheless, Q2’s reading still overshot market expectations of a sharper deceleration to 0.2% growth.
According to Destatis, Q2’s expansion came mainly on the back of the external sector, with exports picking up and imports falling slightly compared to Q1. Private consumption and public spending also supported Q2’s expansion, albeit to a lesser extent than the external sector. Conversely, fixed investment was a drag on growth. In annual terms, GDP rose 3.1% in Q2, which marked a strong pickup over Q1’s 1.5% increase. More complete results, including a detailed breakdown by expenditure, will be released on 24 August.