German economy has both feet on the floor
It looks like German economy has both feet on the floor after weak beginning of the year, Bloomberg reports. Second quarter growth was 0,5%, which is higher than forecast of economists. It is also a sign of stable development in Europe’s largest economy despite of global trade tension.
Photo © Gerd Altmann, CC0 1.0
It looks like German economy has both feet on the floor after weak beginning of the year, Bloomberg reports.
Second quarter growth was 0,5%, which is higher than forecast of economists. It is also a sign of stable development in Europe’s largest economy despite of global trade tension. High domestic demand supports this growth.
After data was published, euro grew to $1,1419, and German DAX rose by 0,7%.
However, it is too early to say that Germany is isolated from events in global economy, and risks for German economy are still high. Today they include slowdown of China as well as Turkey’s crisis.
German economy growth in the second quarter was stimulated by higher government and private spending as well as by investments into equipment and construction. Import grew more than export.
Auto producers including Volkswagen AG, Daimler AG and BMW AG warned about trade war threat. Other companies are more optimistic. HeidelbergCement AG confirmed its 2018 forecast even after negative currency effect resulted in lower revenue in the second quarter.
News from Germany came after second and third largest economies of euro area showed less optimistic results. French growth failed to accelerate after series of strikes. Italy’s economic development pace was the lowest in two years.