Germany's economy expanded in the second quarter on the back of foreign trade and spending, providing support to overall euro area expansion, which was weighed down by flat growth in France and Italy ahead of "Brexit" vote.
Gross domestic product climbed 0.4 percent quarter-on-quarter, in line with the preliminary estimate, but slower than the 0.7 percent expansion seen in the March quarter, detailed data from Destatis showed Wednesday.
Positive contributions to growth came from the balance of exports and imports.
Exports advanced 1.2 percent, while imports slid 0.1 percent sequentially, providing the strongest contribution to GDP growth in the reference period, adding +0.6 percentage points.
Domestic demand showed mixed signals. Household spending gained 0.2 percent and government expenditure grew 0.6 percent.
Looking ahead, private consumption should remain an important growth driver on the back of low inflation, low interest rates, low unemployment and higher wages, said Carsten Brzeski, an economist at ING.
However, capital formation declined compared with the first quarter. Fixed capital formation in machinery and equipment dropped 2.4 percent and in construction by 1.6 percent from the first quarter.
Brzeski observed that some government support is needed to kick-start investment in an ageing economy. Not only at the national level but also at the European level, the economist added.
On a yearly basis, GDP advanced 1.8 percent, slightly slower than the first quarter's 1.9 percent increase.
The price-adjusted GDP grew 3.1 percent in the second quarter of 2016, which was the largest increase in five years. Both annual numbers came in line with the preliminary data released on August 12.
Purchasing Managers' survey showed that the private sector grew at a slower pace in August as services activity growth hit a 15-month low.
Another report from Destatis today showed that the budget surplus was EUR 18.5 billion in the first half of 2016, equivalent to 1.2 percent of GDP.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.