German economy likely grew by around 0.3 percent in second-quarter: finance ministry

Sun Jul 19, 2015 6:09pm EDT
 
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BERLIN (Reuters) - The German economy likely grew by around 0.3 percent in the second quarter, the finance ministry said on Monday, adding that the mood in corporate boardrooms remained largely optimistic despite the Greek debt crisis.

In the first quarter, growth in Europe's largest economy slowed to 0.3 percent, mainly due to weaker foreign trade, after an unexpectedly strong 0.7 percent expansion between October and December last year.

The finance ministry said in its monthly report that the German economy was in an upswing, with domestic demand remaining the key growth driver, but foreign trade also picking up.

"According to the latest economic data, gross domestic product (GDP) likely increased in the second quarter at a similar rate as in the previous quarter when it rose by 0.3 percent on a seasonally and price-adjusted basis," it added.

Demand and production in the industrial sector are on an upward trend and the mood among companies is good, the ministry said, adding that assessments of the business situation and outlook remained predominantly optimistic.

The ministry noted however that while morale among businesses was strong, it had deteriorated slightly recently, adding: "This could be related to increased uncertainty due to the situation in Greece coming to a head."

The ministry said there were clear signs that foreign trade was recovering as German exports rose sharply in April and May.

"The revival of export activity may be an indication that global economic expansion is gaining traction," it said, adding that a weaker euro was another positive factor as it made German products cheaper for customers outside the currency bloc.

German tax revenues rose by 5.5 percent to 300 billion euros ($324.8 billion) in the first half of the year compared with the same period last year, the ministry said.   Continued...

 
Loading cranes are seen at a shipping terminal in the harbour in Hamburg September 18, 2014. Picture taken September 18.  REUTERS/Fabian Bimmer