Germany's economy expanded more strongly between April and June than statisticians first calculated, according to revised figures released Tuesday by the federal statistics office Destatis in Wiesbaden. Gross domestic product rose 0.3 percent against the first quarter, an upward correction of 0.1 percentage points from the initial estimate published at the end of July. The first three months of the year had delivered growth of 0.4 percent.
"The German economy is maintaining the growth momentum seen at the start of the year," said Destatis president Ruth Brand, who attributed the performance chiefly to the strength of foreign sales.
Two sets of newly available data pushed the number higher. Turnover in the wholesale and retail trade came in considerably better than statisticians had assumed six weeks ago. Fresh foreign trade information covering June also led to what Destatis described as a noticeable upward revision of export volumes. The office had already flagged foreign demand as the leading driver of the quarter when it issued its preliminary reading in July.
Merchandise exports climbed 2.6 percent quarter on quarter, while service exports held flat, producing a combined export increase of 2.0 percent. Purchases from abroad followed a similar pattern, with goods imports advancing 2.1 percent and imported services edging up 0.3 percent for an overall gain of 1.5 percent.
Domestic demand told a mixed story. Investment slipped, weighed down by a steep contraction in machinery and equipment spending. Household consumption and government outlays each recorded modest increases.
Gross value added across the economy grew 0.4 percent. Manufacturing outperformed with a 0.9 percent rise, led by producers of chemical goods and electrical equipment. Construction contracted again, though the 0.1 percent decline marked what Destatis called a moderation of the downward trend that has dominated recent quarters.
Nearly every corner of the service sector expanded. Information and communication, real estate and housing, and public service providers each posted increases of 0.6 percent compared with the previous quarter. Financial and insurance providers were the sole segment to register a decline in value added.
The revision offers further evidence that the eurozone's manufacturing heartland is absorbing the energy shock triggered by the United States and Israel's war against Iran with less damage than analysts had braced for. Industrial production and shipments abroad have both been improving in recent months despite the conflict's spillover effects.
None of this erases a difficult backdrop. Germany has been treading water for several years under the weight of elevated energy prices, intensifying Chinese competition and tariffs imposed by US President Donald Trump. Expectations ran high in January that Chancellor Friedrich Merz's spending programme for defence and infrastructure would ignite a genuine recovery.
The outbreak of fighting in the Middle East has tempered that optimism, particularly for energy-intensive producers. Berlin now projects growth of just 0.5 percent for the full year.
From breaking news to thought-provoking opinion pieces, our newsletter keeps you informed & engaged.
By subscribing, you agree to our Terms & Conditions and Privacy Policy.
