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.