Germany GDP Q2 2016


German economy decelerates but grows faster than expected in Q2

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.

The government expects economic activity to increase 1.7% in 2016. FocusEconomics Consensus Forecast panelists expect economic activity to expand 1.6% in 2016, which is unchanged from last month’s forecast. For 2017, the panel also forecasts GDP growth of 1.4%.

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Germany GDP Chart

Germany GDP Q2 2016 0

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Federal Statistics Office (Destatis) and FocusEconomics Consensus Forecast

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