FRANKFURT, (Pakistan Point News - APP - 12th Augst,2016) - Germany recorded surprisingly strong growth in the second quarter on the back of exports and domestic demand, data showed Friday, prompting observers to raise their forecasts for Europe's biggest economy. Gross Domestic Product (GDP) expanded by 0.4 percent in calendar- and seasonally-adjusted terms between April and June, twice as much as forecasted by analysts surveyed by Factset.
The pace of growth was slightly slower than the previous quarter's 0.7 percent, a statement from Federal statistics office Destatis said, but on a year-on-year basis, the expansion reached 3.1 percent -- "stronger than at any time in the past five years". Demand for exports rose compared to the first three months of the year, while "private consumption spending and state consumption spending also bolstered growth," the statistics office said.
Rising income over the last year has boosted household consumption, while federal spending has also surged as Germany plays host to 1.1 million asylum seekers who arrived in the country last year. Holger Schmieding, an analyst at Berenberg bank, said: "Germany's economic position continues to look strong." He pointed to "solid domestic fundamentals, a buoyant labour market, rising real incomes, a modest fiscal stimulus and excellent financing conditions," which he believes would help Germany weather the fallout from Brexit.