Germany: Economy accelerates in second quarter
August 23, 2013
In the second quarter, GDP increased a seasonally adjusted 0.7% over the previous quarter, confirming the flash estimate released on 14 August. The reading represents an acceleration compared to the revised flat growth rate observed in the first quarter (previously reported: +0.1% quarter-on-quarter) and was above market expectations of a 0.6% increase. Compared to the same quarter last year, GDP increased 0.9% in Q2, contrasting the 1.6% contraction observed in Q1.
The faster increase in the second quarter was seen across the board. Private consumption and government spending accelerated over the previous period, increasing 0.5% and 0.6% respectively (Q1: +0.2% qoq; Q1: +0.1% qoq, respectively). In addition, gross fixed investment swung from a 2.1% contraction in Q1 to a 1.9% expansion in Q2.
The external side of the economy showed a notable improvement, with exports of goods and services increasing 2.2% in Q2 (Q1: -0.7% qoq). Imports grew 2.0% in the second quarter, contrasting the 0.4% decline observed in the first. Consequently, the external sector's net contribution to overall economic growth swung from minus 0.2 percentage points in Q1 to plus 0.2 percentage points in Q2.
The Bundesbank expects the economy to grow 0.3% this year. For 2014, the Bank sees economic growth accelerating to 1.5%. FocusEconomics Consensus Forecasts panellists are more optimistic than the official estimates and expect economic activity to expand 0.6% in 2013, which is down 0.1 percentage points from last month's projection. For 2014, the panel forecasts GDP to accelerate to 1.7%
Author: Ricardo Aceves, Senior Economist