The German economy, the biggest in the euro zone, grew by 0.9% in the second quarter from the preceding three months, buoyed notably by domestic demand.
German gross domestic product expanded by 0.9% quarter-on-quarter in the period from April to June, up from 0.7% in the preceding three months, the federal statistics office, Destatis, said in a statement. It was the fastest rate of growth since the first quarter of 2001.
'Growth impulses came primarily from inside Germany,' the statisticians said. 'While the momentum of foreign trade weakened, it was primarily investment in construction and equipment that contributed to the economic pick-up in the second quarter,' it added.
However, analysts are sceptical whether the German economy will be able to maintain the same momentum during the coming months. Much of the current pick-up in domestic demand is attributable to consumers bringing forward big-ticket purchases ahead of the planned rise in value-added tax from the beginning of next year.
The government is raising VAT from 16% to 19% with effect from January 1 and many observers believe that will put the brakes on consumer demand next year.
On an annual basis, second-quarter German growth slowed to 1% in the April-June period from 3.1% in the preceding three months. But that was mainly because there were fewer working days in the second quarter than in the first quarter, giving the timing of the Easter holidays.
Adjusted for the number of working days, GDP expanded by 2.4% year-on-year in the second quarter, faster than the 1.8% recorded in the previous quarter, Destatis calculated.
