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German economy sees ‘record’ growth of 2.2%

The German economy grew by 2.2% in the three months to the end of June, its fastest quarterly growth in 20 years, official figures show.

“Such quarter-on-quarter growth has never been recorded before in reunified Germany,” the national statistics office, Destatis, said.

The main reason for the higher-than-expected growth was strong exports, helped by a weaker euro.

Separate figures showed that the French economy grew by 0.6% in the quarter.

Growth figures for the rest of the eurozone will be published later.

‘Rapid recovery’

German economy sees 'record' growth of 2.2%

Growth credited to strong exports and weaker euro.

Destatis also revised up the German growth figure for the first three months of the year, to 0.5% from 0.2%.

As well as the “strong contribution” from exports, the office said household and government spending also helped to boost growth in the second quarter.

“The German economy is recovering rapidly,” Destatis said.

Analysts had expected strong growth of about 1% to 1.5%.

“The strong second quarter performance of the German economy is impressive but not surprising,” said Carsten Brzeski at ING Financial Markets.

“The German economy mainly benefited from two factors – a catching up in the construction sector after the harsh winter and strong foreign demand for German goods.”

Despite the strong figures, economists do not expect the German economy to continue growing at such a strong rate.

“Looking ahead, it is almost needless to say that the current growth momentum is hardly sustainable in the coming months. With the one-off impact from the construction sector and normalising of export growth, German growth will return to more ordinary numbers,” Mr Brzeski said.

The German Economy Minister Rainer Bruederle said the latest quarterly GDP figures “make growth of well above 2% possible for 2010″.

Source : BBC.co.uk

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