Construction crew on a worksite ©dpa

German economy remains on growth path

Construction crew on a worksite ©dpa
The German economy saw stronger growth again in the second quarter of 2018, though it did not quite manage to keep up the rapid pace of expansion observed in the previous year. According to provisional data from the Federal Statistical Office, between the first and second quarters, gross domestic product (GDP) rose by 0.5% after adjustment for price, seasonal and calendar variations. Compared with the same quarter last year, it was up by 2.0% in price and calendar-adjusted terms.

This means that the longest economic boom since 1991 remains in full swing. According to revised figures published by the Federal Statistical Office, GDP rose by 0.4% (previously 0.3%) in the first three months of the year. Based on its latest forecast, the Bundesbank expects real, calendar-adjusted GDP to increase by 2.0% this year.

While its statisticians confirmed a calendar-adjusted GDP rise of 2.5% in 2017, they revised the quarterly growth figures. These were revised to growth of 0.5% (previously 0.6%) for the final quarter of 2017, 0.6% (previously 0.7%) for the third quarter, 0.5% (previously 0.6%) for the second quarter and 1.1% (previously 0.9%) for the first quarter.

According to figures from the Federal Statistical Office, positive contributions came primarily from Germany, with a rise in private and government consumption as well as increased investment. For instance, investment in construction, machinery and equipment and other assets was slightly higher than in the first quarter of 2018. Furthermore, more goods and services were also exported than in the preceding quarter.

Growth in the euro area

The euro area economy also expanded in the second quarter of 2018. According to figures published by Eurostat, the statistical office of the European Union, seasonally adjusted GDP rose by 0.4% on the quarter in the second quarter. It had likewise risen by 0.4% in the first quarter. Compared with the same quarter last year, seasonally adjusted GDP was up by 2.2%.