Growth of the German economy, the biggest in the euro zone, is likely to have outpaced the first-quarter rate of 0.4% in the second quarter of the current year, the Bundesbank said today.
Growth is being driven by strong exports, while domestic industry orders stagnated in May and the construction sector developed 'unfavourably' in the spring months, the central bank said in its July monthly report.
'Lively foreign demand coupled with strong industrial output suggest that strong growth impulses came from outside Germany. On the other hand, domestic demand is increasing only moderately,' the Bundesbank said.
Concrete second-quarter GDP data are scheduled to be published by the federal statistics office on August 12.
If the actual numbers prove to be in line with the Bundesbank's diagnosis, they will confirm that economic recovery in Germany is gradually gathering momentum after three years of stagnation.
The head of the panel of independent economic advisors to the government, also known as the "five wise men, today raised the panel's growth forecast to 1.8% this year from 1.5%-1.7% and said exports will jump almost 10% in 2004.
