German economy expands in second quarter

Europe's largest economy grew by 0.4 percent in the April-to-June quarter year on year, the National Statistics Office (Destatis) reported Wednesday.

The figure - adjusted for seasonal, calendar and price effects - was higher than the 0.2-percent expansion that had been penciled in by analysts.

Second-quarter growth didn't match the 0.7-percent jump logged in the first three months of the year, but was still solid, given mounting geopolitical tensions, post-Brexit-vote worries and slowing growth in some crucial emerging economies such as China.

Destatis noted Q2 growth was mainly driven by rising exports and a further pick-up in domestic consumption.

Germany's central bank, the Bundesbank, expects full year-growth to come in at 1.7 percent this year, which would match last year's expansion.

Well-lined purse

In a separate press release, Destatis said Germany as a whole, including its 16 regional states plus its communities, logged a budget surplus of 18.5 billion euros ($20.9 billion) for the first six months of the year.

It said full state coffers reflected a continuously robust labor market with record-low unemployment, translating into more tax revenues.

Berlin also profited from the European Central Bank's low-interest rate policy, enabling the state to borrow money at lower costs or even make money by fresh borrowing as evident right now in the country's sovereign bonds with a 10-year maturity, coming with sub-zero interest.

hg/sri (dpa, Reuters, AFP)