Economic growth in Germany, the euro zone's largest economy, was flat in the second quarter compared with the previous three months, but Economy Minister Wolfgang Clement has predicted a sharp pickup in the second half.
The country's gross domestic product was unchanged in the April-June period and growth for the first quarter was revised down to 0.8%, according to the federal statistics office. The first estimate for first quarter growth had been 1%.
The second quarter figures, which had been predicted by the central bank and private economists, are provisional but corrected for seasonal variations.
Clement stuck by the government's forecast of 1% GDP growth in 2005, saying the economy was set to accelerate in the second half.
'All the signals point towards a strong improvement of the economic climate in the second half,' he said in a statement issued after the figures. 'We can therefore confirm our spring forecasts,' he added.
Today's figures showed that exports continued to grow, but because of a sharp surge in imports linked to rising oil prices, the trade sector overall had a negative impact on economic momentum.
But in a positive development, domestic demand, which covers household spending and industrial investment, picked up in the second quarter. Compared with the second quarter of 2004, the German economy expanded 1.5% the same time this year after a yearly contraction of 0.3% in the first quarter of 2005.
In another report, the statistics office said annual inflation came to 2% in July against 1.8% in June. Prices rose by 0.5% in July compared with June.
