Third-quarter growth picked up in Germany, the biggest euro zone economy, as business investment and consumer spending took over from the traditional export engine.
The economy expanded by 0.7% from the second quarter, when it had grown by 0.3%, the federal statistics office said.
On an annualised basis, economic activity was up by 2.5% when adjusted for calendar effects.
Growth was underpinned by construction and infrastructure investments and by 'a moderate increase in household spending,' historically the German economy's weakest link.
Trade did not contribute this time to the higher figure 'owing to a net increase in imports,' the office said.
The result was widely expected, as is an economic slowdown for the rest of the year and into 2008.
Demand from the US, a key export market, has been hit by problems linked to the sub-prime housing market crisis, while the euro's rise against the dollar has also begun to weigh on German exports.
High oil prices and tighter credit conditions brought on by the US financial turmoil are limiting economic activity as well. It is expected to slow sharply next year, with the government forecasting growth of 2%, down from 2.4% in 2007.
Some bank analysts have issued 2008 growth estimates of 1.6-1.8%.
