Strong exports helped the German economy grow at its fastest rate in over three years in the second quarter, but analysts said growth may have peaked for this year with oil prices high and domestic demand still weak.
Preliminary data from the Federal Statistics Office on Thursday showed that, adjusted for seasonal factors and working days, Europe's largest economy had expanded by 0.5 percent quarter on quarter, exactly in line with analysts' forecasts.
It was the strongest growth since the first quarter of 2001, and the fourth consecutive period of quarterly expansion.
Separate data on Thursday showed France's economy had expanded significantly more than expected in the second quarter, fuelling hopes that eurozone growth could beat forecasts.
Year-on-year, second-quarter German GDP grew by 2.0 percent, the Office said. Adjusted for the number of working days, the economy grew by 1.5 percent. Analysts had forecast the economy would grow by 1.4 percent year-on-year.
The Office also confirmed the German economy had grown by 0.4 percent quarter-on-quarter in the first quarter of 2004.
Economy Minister Wolfgang Clement said the GDP data showed the economic upswing was accelerating in Germany and that 2004 growth was likely to come in at the upper end of the government's 1.5 to two percent forecast range.
"As you know, this economic upswing is very strongly supported by the export industry," said Clement. "It has not yet fed through sufficiently into the domestic economy." Stefan Schneider, a Deutsche Bank economist, said the figures, combined with French quarterly growth of 0.8 percent, could mean eurozone second quarter growth would be higher than the 0.6 percent forecast of economists polled by Reuters.
"On that basis, it could well be that we see (eurozone) growth of 0.7 percent in the second quarter," said Schneider. However, separate data on Thursday showed the Dutch economy unexpectedly shrank by 0.2 percent in the second quarter.
Eurostat, the European Union's Statistics Office, is due to release second quarter eurozone GDP data on Friday at 0900 GMT.
ING BHF-bank economist Gerd Hassel said weak consumer sentiment, exacerbated by unpopular labour market reforms and persistently high unemployment, was holding back a recovery in private consumption, which has declined over the past two years.
Comments
Comments are closed.