German GDP Growth Confirmed at 0.4% in Q2


The German economy advanced a seasonally-adjusted 0.4 percent in the June quarter of 2016, slowing from a 0.7 percent expansion in the preceding quarter and matching preliminary estimates. Net trade was the biggest contributor to growth while private consumption slowed and investment shrank.

Quarter-on-quarter, private consumption rose 0.2 percent, compared to a 0.3 percent growth in the March quarter. Public consumption advanced by 0.6 percent, slowing from a 1.3 percent increase in the previous three months. Overall consumption contributed 0.2 percentage points to growth. Gross fixed capital formation shrank 1.5 percent, following a 1.7  percent expansion in the previous quarter. Investment in machinery and equipment dropped the most by 2.4 percent (after a 1.2 percent rise in the first quarter), followed by construction (-1.6 percent from +2.3 percent). In contrast, investment in other products grew by 0.7 percent, slowing from a 0.9 percent rise in the previous three months. Exports increased by 1.2 percent, compared to a 1.6 percent growth in the March quarter. Imports declined by 0.1 percent, swinging from a 1.3 percent rise in the previous three months. That brought an upward effect to the GDP (+0.6 percentage points). Inventories were down, subtracting 0.1 percentage points off growth.

Year-on-year, the GDP expanded 3.1 percent, accelerating from a 1.5 percent growth in the previous three months. It was the strongest expansion since the second quarter 2011 as all components in the economy showed an expansion. Household final consumption rose 2.4 percent, faster than a 1.7 percent growth in the previous quarter. Government consumption expanded by 3.9 percent, slowing from a 4.4 percent expansion in the March quarter. Gross fixed capital formation also grew 2.9 percent (after a 1.1 percent expansion in the preceding quarter). Construction investment grew the most by 5.1 percent, followed by machinery and equipment investment (+4.4 percent) and other products (+2.7 percent). Overall investment added 0.9 percentage points to growth. In contrast, the reduction in inventories slowed down the GDP growth by 0.4 percentage points. The balance of exports and imports added 0.6 percentage points to the year-on-year GDP growth. 

German GDP Growth Confirmed at 0.4% in Q2


Destatis l Rida Husna | rida@tradingeconomics.com
8/24/2016 8:28:33 AM