German GDP growth exceed forecasts monthly and yearly

The German economy continues to grow. In the second quarter of 2016, the gross domestic product (GDP) rose 0.4% on the first quarter of the year after adjustment for price, seasonal and calendar variations. At the beginning of the year 2016, a strong GDP growth of 0.7% had been recorded.

The quarter-on-quarter comparison (upon adjustment for price, seasonal and calendar variations) shows that positive contributions came especially from the balance of exports and imports. According to provisional results, exports were up, while imports were slightly down compared with the first quarter of 2016. Both household final consumption expenditure and government final consumption expenditure supported growth, too. However, growth was slowed by weak gross capital formation. After a strong first quarter, a decline was recorded especially in gross fixed capital formation in machinery and equipment and in construction.

Economic growth accelerated year on year, too. The price-adjusted GDP rose 3.1% in the second quarter of 2016, which was the largest increase in five years. Adjusted for the exceptionally high calendar effect, the GDP growth was 1.8% after 1.9% (unadjusted 1.5%) in the first quarter of 2016.

The economic performance in the second quarter of 2016 was achieved by 43.5 million persons in employment in the domestic territory, which was an increase of 529,000 or 1.2% on a year earlier.