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Germany: GDP contracts for the first time in five quarters

September 1, 2014

In the second quarter, GDP contracted a seasonally-adjusted 0.2% over the previous quarter according to more complete data published by the Federal Statistics Office (Destatis) on 1 September. The figure represents the first contraction since Q1 2013. The reading, which came in well below the 0.7% growth rate observed in Q1, matched the preliminary estimate and met market expectations. Compared to the same quarter last year, GDP increased 0.8% in Q2, which was below the 2.5% expansion registered in the previous quarter.

The contraction was mainly driven by shrinking investment. Private consumption tallied a 0.1% expansion in Q2, which was down from Q1’s 0.8% rise. Government consumption slowed down from a 0.4% expansion in Q1 to 0.1% growth in Q2. Meanwhile, gross fixed investment swung from a 2.9% expansion in Q1 to a 2.3% contraction in Q2, which marked the largest contraction since Q1 of last year.

On the external front, exports of goods and services increased a modest 0.9% in Q2, which came in above the flat reading recorded in Q1. Imports growth strengthened from a 0.5% increase in Q1 to a 1.6% expansion in Q2. Consequently, the external sector’s net contribution to overall economic growth in Q2 remained stable at the minus 0.2 percentage points recoded in the first quarter.

For 2014, the Bundesbank expects economic activity to increase 1.7%. For 2015, the Bank sees economic growth picking up slightly to 1.8%. FocusEconomics Consensus forecast panelists expect economic activity to expand 1.9% in 2014, which is down 0.1 percentage points from last month’s forecast. For 2015, the panel also forecasts GDP growth of 1.9%.


Author: Teresa Kersting, Economist

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Germany GDP Chart


Germany GDP Q2 2014

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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