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German economic growth picks up, finances in black

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AFP Frankfurt
Last Updated : Aug 25 2015 | 1:57 PM IST
German economic growth picked up in the second quarter of 2015, and the public finances of Europe's economic powerhouse were firmly in the black in the first half, data showed today.
German gross domestic product (GDP) expanded by 0.4 per cent in the period from April to June, up from 0.3 per cent in the first quarter, the federal statistics office Destatis said, confirming a flash estimate released earlier this month.
At the same time, Destatis calculated that Germany's finances were firmly in the black, with the federal, regional, municipal and welfare budgets running up a combined surplus of 21.1 billion euros (USD 24.4 billion) in the period from January to June.
That is equivalent to 1.4 per cent of GDP, Destatis said.
Germany's public finances "continued to profit from the favourable employment situation and positive growth, as well as moderate spending," Destatis said.
But the statisticians warned against extrapolating the first-half figures on to the year as a whole, as the budget surpluses tended to be lower in the second half of the year.

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Under EU rules, member states are not allowed to run up budget deficits of more than 3.0 per cent of overall output, but Germany's finances were in surplus last year.
Turning to the second-quarter GDP data, Destatis said that "positive impulses came primarily from foreign trade".
Exports were up 2.2 per cent quarter-on-quarter and imports rose by 0.8 per cent, which meant the resulting trade surplus -the difference between exports and imports- added 0.7 percentage point to growth, Destatis calculated.
That was "the biggest growth engine in the second quarter," it said.
On the side of domestic demand, the signals were more mixed.
While private households marginally increased spending by 0.2 per cent and public sector spending rose by 0.3 per cent, investment in plant and equipment declined by 0.4 per cent.
"All in all, domestic demand decreased slightly in the second quarter, knocking 0.3 percentage point off the overall growth rate," Destatis said.

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First Published: Aug 25 2015 | 1:57 PM IST

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