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German economy soars at fastest pace in 2 decades
[Dawn] Germany's economy surged ahead in the second quarter, growing 2.2 per cent -- the fastest pace since reunification two decades ago and beating market forecasts -- as a global recovery fed demand for its exports.The first-quarter growth figure for Europe's biggest economy also was revised upward Friday to 0.5 per cent -- more than double the initial reading of 0.2 per cent. ''The recovery of the German economy, which lost momentum at the turn of 2009/2010, is really back on track,'' the Federal Statistical Office said as it released the preliminary second-quarter figures. Economists had expected second-quarter growth of less than 2 per cent. In year-on-year terms, output rose by 3.7 per cent. While foreign trade was one of the key drivers of growth, household and government consumption also contributed to the rise in gross domestic product, the statistical office said. An improving global economy has fed demand for German exports, while industrial orders and business confidence have been rising. The economy shrank by a painful 4.9 per cent last year -- easily the worst performance since World War II. The government still has an official forecast for this year of 1.4 per cent growth, but Economy Minister Rainer Bruederle said Friday that expansion of ''well over 2 percent'' is now possible. ''One cannot speak of an economic miracle, but we are experiencing an XL upswing at the moment,'' Bruederle said. Carsten Brzeski, an economist at ING in Brussels, said the economy benefited from ''a catching up in the construction sector after the harsh winter and strong foreign demand for German goods.'' He cautioned that ''German growth will return to more ordinary growth numbers'' looking forward. ''Nevertheless, despite an inevitable slowdown, all ingredients are there for the German economy to take the next step toward a self-sustained recovery.'' Second-quarter gross domestic product figures for the full 16-nation eurozone were due later Friday. Posted by: Fred 2010-08-14 |
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