Germany GDP


Germany: Economy shows resilience in second quarter despite debt woes

August 23, 2012

Despite the difficult economic situation in the Eurozone and the dip in global economic activity, the economy continues to grow. In the second quarter, GDP expanded a seasonally and working-day adjusted 0.3% over the previous quarter, which confirmed the flash estimate released on 14 August. The print was below the 0.5% expansion recorded in the first quarter but overshot market expectations that had the economy contracting 0.1%. Compared to the same period a year ago, the economy slowed from a 1.7% increase in the first quarter to a 0.5% expansion in the second. The stronger-than-expected print reflected an improvement in domestic demand, with private consumption accelerating from a 0.1% increase in Q1 to a 0.4% expansion in Q2. In addition, government spending grew 0.2% in the second quarter, which followed an increase of the same magnitude in the first three-month period. In contrast, fixed investment remained in the red for the second consecutive quarter (Q1: -0.9% quarter-on-quarter; Q2: -0.9% qoq). Meanwhile, the external sector continued to contribute to overall economic growth positively, as exports of goods and services expanded 2.5% in the second quarter, faster than the 1.2% increase tallied in the first. Imports swung from a 0.2% contraction in Q1 to a 2.1% expansion in Q2. Consequently, the external sector's added a net 0.3 percentage points to overall economic growth in Q2, which followed a 0.7 percentage-point contribution in Q1. The government expects the economy to expand 0.7% this year, before accelerating to 1.6% in 2013. Meanwhile, the Bundesbank revised its growth forecasts and now expects the economy to grow 1.0% this year, which is up from its previous 0.6% estimate. For 2013, the Bank sees economic growth picking up to 1.6%, down from its previous 1.8% projection

Author:, Senior Economist

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Germany GDP Chart

Germany GDP Q2 2012

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

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