German economy grows 0.4% in second quarter

The economy grew by 0.4 percent on the quarter between April and June after expanding by 0.3 percent in the first three months of 2015.

The German economy, Europe’s biggest, grew by 0.4 percent in the second quarter of 2015, fractionally faster than in the preceding three months, but slightly short of analyst expectations. “Such a cocktail of strong external steroids should have given wings to the economy”.

“The German economy continued along its positive growth path”, the statisticians said.

ING DiBa economist Carsten Brzeski said that “neither Greece nor China were able to stop the German economy”. Capital Economics has forecast that growth will slow to 0.2 percent as it sees industrial production shaving up to 0.2 percentage points off GDP growth and a drop in retail sales suggesting household spending growth might be weaker and counter what is likely to be a small positive contribution from foreign trade.

Spain and Greece have provided the high points of the period’s GDP so far.

In Finland, gross domestic product (GDP) contracted in April-June for the fourth consecutive quarter as the Nordic euro zone member struggles to revive exports to its major markets, Europe and Russian Federation.

In France, a jump in exports was not strong enough to offset the impact of weak consumer spending and changes in inventories and growth came to a standstill after a strong first quarter.

Unadjusted data showed the economy expanded by 1.6 per cent on the year in the second quarter, surpassing the Reuters consensus forecast for 1.5 per cent growth.

The decline was widely anticipated across financial markets.

The Bundesbank said in July that the German economy is supported by strong consumption and wage increases. ThyssenKrupp AG, Germany’s largest steelmaker, reported third-quarter profit that beat analysts’ estimates. “Its economy is driven by both exports and internal demand and this means that as long as the euro area continues to recover, there shouldn’t be a problem”.

UniCredit (Milan: UCG.Michigan – news) economist Andreas Rees said that the German economy “remains on its fundamental upward trend”.