Foreign trade drives German economic expansion in Q2: official data

Analysts had predicted a slight decrease to 107.6 points. However, Ifo economistKlaus Wohlrabe said the latest market turmoil in China, fed by concerns about an economic slowdown, was barely reflected in the August sentiment survey. Current figures present that German’s financial system, Europe’s largest, is more and more supported by home shopper spending in addition to exports.

“They’re relieved by what China has done”, said Chris Gaffney, president of EverBank World Markets, and are telling themselves: “Maybe it’s time to get back in there”.

“The German economy continues to be a rock in turbulent waters”, said Ifo chief Hans-Werner Sinn. The Nasdaq composite declined 19.76 points, or 0.4 percent, to 4,506.49.

Turning to growth, Destatis said that foreign trade was the “biggest driver of growth in the second quarter”, with exports up 2.2 percent quarter-on-quarter.

Swiss agricultural chemicals company Syngenta was up more than 9 percent after a source said that Monsanto had sweetened a takeover offer.

At the same time, Destatis calculated that Germany’s finances were firmly in the black, with the federal, regional, municipal and welfare budgets running up a combined surplus of 21.1 billion euros ($24.4 billion) in the period from January to June, equivalent to 1.4 percent of GDP. “The IFO number this morning… shows domestic demand is holding up quite well so far”.

“The balance of exports and imports contributed 0.7 percentage points to GDP growth and thus was its main driving force”, Destatis added.

The Asian stocks recovered from early weakness to end mostly higher even as Chinese and Japanese shares succumbed to heavy selling pressure on renewed fears over China’s stalling growth and the risk to China’s real economy from its stock-market turmoil.

Greece’s biggest creditor Germany has made a huge profit on the country’s debt crisis over the last 5 years as it saved through lower interest payments on funds borrowed amid investor “flights to safety”, according to a study by the private, non-profit Leibniz Institute of Economic Research in a research paper it published.