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Exports boost German GDP in Q2 but Brexit clouds loom large

Staff Writer | August 24, 2016
A sharp rebound in exports kept the German economy's expansion on track during the second quarter of 2016.
German GDP boost
Germany   Net foreign demand, exports minus imports as it were, jumped 1.3%
Detailed data from the Federal Statistics Office confirmed that sales of goods and services abroad were the main driver of growth in the euro area's largest economy over the three months to June. Gross domestic product growth of 0.4% quarter-on-quarter was also confirmed.

Net foreign demand, exports minus imports as it were, jumped 1.3% quarter-on-quarter, offsetting a 0.2% fall in household consumption and - above all- large declines in investment within construction and manufacturing.

Imports slipped 0.1% over the quarter, contributing to a positive 0.6 percentage point contribution from net trade.

Economists at Pantheon Macroeconomics emphasised that the quarter-on-quarter volatility - albeit dramatic on the surface - in the different components of aggregate demand was in fact "not unsual".

Non-residential construction investment shrank by 5.2% quarter-on-quarter and investment in machinery and equipment by 2.4%.

Germany achieved a budget surplus of 18.5 billion euros ($20.7 billion) in the first half of 2016, official data showed.

Compared to the same period last year, German public revenue increased 4.2 percent to 692.9 billion euros, while expenditure went up by 3.6 percent to 674.4 billion euros.

According to Destatis, the most important source of government income was taxes which jumped 4.8 percent yearly to 365.1 billion euros. The increase of expenditure was mainly due to higher spending on asylum seekers, over one million of whom arrived in Germany last year.