As the Federal Statistics Office announced today, the German economy showed quarter-on-quarter growth of only 0.1%, in seasonally adjusted terms, in the second quarter of 2011. Investment in machinery and equipment, in particular, was a source of positive impetus. On the other hand, private consumption and construction had a negative impact on economic performance, which was also hit by negative net exports.
While there is no doubt that the German economy slowed in the second quarter, this economic slowdown is exaggerated by a number of special factors. First, energy production has suffered a considerable slump over the last quarter, down by almost 8% on the first quarter of the year in seasonally adjusted terms. Second, it is important to bear in mind that the first quarter brought an unusually strong increase in construction, meaning that a slight move in the opposite direction was to be expected in Q2. If we leave these two factors out of the equation, the German economy would have grown by around 0.5% quarter-on-quarter, as opposed to by 0.1%.
Looking ahead to the rest of the year, we expect the moderate economic development in Germany to continue and forecast – not least against the backdrop of the GDP revisions over the past few quarters – an average economic growth to the tune of around 3% this year.