Finance

German Economy Expands On Domestic Demand In Second Quarter

German Economy Expands On Domestic Demand In Second Quarter

The provisional figure was lower than the 0.7 percent forecast by analysts surveyed by Factset.

The German economy, Europe's largest, continued its strong performance in the second quarter with gross domestic product growing 0.6 percent over the previous quarter.

The Statistics Office said that growth in the April-June period was mainly driven by domestic demand as households and state authorities increased their spending and companies boosted investment in buildings and equipment.

However, the economist noted that the drivers supporting the domestic economy, like record high employment, higher wages and government consumption, might lose some momentum along the way, without turning negative.

Foreign trade, however, weighed on Germany's performance, it said, because imports grew more strongly than exports, on a quarterly basis.

Looking ahead the EUR USD exchange rate rally tomorrow morning if the Eurozone's latest GDP estimate shows that economic growth in the bloc rose from 0.5% to 0.6% in the second quarter. Although, this was slightly slower than the forecast of 0.7%, the economy expanded for the 12th consecutive quarter.

Destatis said both household spending and general government expenditure increased markedly.

RSS Chief Mohan Bhagwat prevented from hoisting Tricolour in Kerala
Mohan Bhagwat has been in Palakkad since Monday and the programme at the school had been announced several days ago. The state has witnessed political violence involving activists from the ruling CPI (M) and the RSS.

As a outcome, and following revisions to GDP data before 2017, economists at Commerzbank raised their growth forecast for the German economy to 2% this year from an earlier estimate of 1.6%.

With just a month to go to federal elections, the economic signs appear positive for Angela Merkel's ruling Christian Democrat party, and polls point to the CDU coming away with the largest share of the vote.

The Statistics Office will publish its detailed GDP growth data on August 25. Growth figures bode well for Angela Merkel as she bids for a fourth term as chancellor.

The Euro was initially able to recoup some of its recent losses against the US Dollar this morning as Germany released another solid growth report.

Price-adjusted GDP growth came in at 0.8% versus 3.2% a quarter ago.

The "Greenback" was also strengthened by suggestions that the upbeat sales data, alongside a broader uptick in the U.S. economy at the start of the third quarter may prompt the Federal Reserve to move forwards with plans to raise interest rates despite lacklustre inflation figures.


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