While losing some of its previous momentum, the German economy is still in a robust state, logging higher-than-expected growth in the second quarter. Exports and private consumption were behind the expansion.
Germany’s gross domestic product (GDP) rose by 0.4 percent in the second quarter, compared with the first three months of the year, the National Statistics Office (Destatis) said Friday in its first Q2 growth estimate.
Growth was thus twice as high as penciled in by analysts, but failed to match the 0.7-percent jump quarter on quarter, logged in the January to March period.
The Wiesbaden-based statistics office attributed second-quarter growth to German companies’ booming exports, with shipments abroad picking up even further from an already high first-quarter level.
Destatis also noted that private consumption played no small role in supporting economic expansion.
Many consumers across Europe’s powerhouse keep being on a spending spree as yields on capital are extremely low, lessening people’s willingness to save money.
Also, the domestic labor market is in good shape, with unemployment having reached the lowest level in 25 year. Wages and pensions have been on the rise in the country, leaving consumers with more money in their pockets, all the more so since inflation is low and does not really eat into their incomes.
In a year-on-year comparison, second-quarter GDP surged by 3.1 percent (adjusted for price developments), marking the biggest jump in five years, Destatis said.
In a separate press release on Friday, Destatis confirmed Germany’s consumer price index rose by 0.4 percent, marking the third slight monthly increase in inflation this year.