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Image: picture-alliance/dpa/F. Rumpenhorst

German economy expands in second quarter

August 24, 2016

The German economy has logged another quarter of expansion, the National Statistics Office has confirmed. It also said Europe's powerhouse logged a decent budget surplus for the first six months of the year.


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.

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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)