German economy grows 0.3 per cent in Q2 despite European financial woes - InfoNews

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German economy grows 0.3 per cent in Q2 despite European financial woes

FILE - In this Feb. 9, 2012 file photo, workers build Ford Fiesta's at a Ford factory in Cologne, Germany. Germany's economy, Europe's largest, grew a larger-than-expected 0.3 per cent in the second quarter as consumer spending and strong exports helped stave off effects of the eurozone debt crisis, the Federal Statistical Office said Tuesday, Aug. 14, 2012. (AP Photo/Frank Augstein, File)
August 14, 2012 - 3:04 AM

BERLIN - Germany's economy, Europe's largest, grew a larger-than-expected 0.3 per cent in the second quarter as consumer spending and strong exports helped stave off effects of the eurozone debt crisis, the Federal Statistical Office said Tuesday.

Though a slowdown from the 0.5 per cent growth of gross domestic product in the first quarter, the gain was greater than the 0.2 per cent widely forecast by economists.

The German economy so far has been relatively unaffected by the debt crisis afflicting its eurozone partners but many have worried it will soon be dragged down as well.

Earlier this month, the Economy Ministry and the statistical office reported that industrial production and exports slipped in June, underlining those concerns.

Carsten Brzeski, an economist with ING bank in Brussels, said the new figures were clearly good news, but that the sharp drop in new orders from the other countries using the euro currency since the beginning of the year portends a further slowdown.

"The German economy has once again escaped the technical recession many other eurozone countries are currently experiencing with no more than a fright," he said in a research note. "In fact, the economy remains the stronghold of the eurozone — however, another strong quarter merely glosses over the fact that even the stronghold has already caught the euro crisis virus.

A technical recession is commonly defined as two consecutive quarters of economic contraction.

The government is predicting overall growth of 0.7 per cent this year, though others are forecasting slightly more robust gains.

News from © The Associated Press, 2012
The Associated Press

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