German GDP Contraction Confirmed in Q2
The German economy contracted a seasonally-adjusted 0.1 percent on quarter in the three months to June 2019, unrevised from the preliminary estimate and following a 0.4 percent growth in the previous period. Net external demand contributed negatively to the GDP as exports fell faster than imports, while investment in construction declined markedly.
8/27/2019 10:03:22 AM
Negative contributions to the GDP growth came from foreign trade (-0.5 percentage points), while gross fixed capital formation was neutral. On the other hand, both household consumption and government spending added 0.1 percentage points, respectively; and changes in inventories contributed 0.3 percentage points.
Exports of goods and services fell 1.3 percent in the June quarter (vs 1.8 percent in Q1) while imports dropped at a slower 0.3 percent (vs 0.9 percent in Q1). In addition, fixed investment declined by 0.1 percent (vs 1.6 percent in Q1) due to a marked fall in construction investment (-1 percent vs 2.5 percent) as mild weather at the beginning of the year led to high growth rates for fixed capital formation in construction in the first quarter. Meanwhile, investment grew in both machinery and equipment (0.6 percent vs 1.4 percent) and in other products (1 percent vs -0.6 percent).
Household consumption edged up 0.1 percent (vs 0.8 percent in Q1) and government spending advanced 0.5 percent (vs 0.8 percent in Q1).
Year-on-year, the economy grew a calendar-adjusted 0.4 percent in the June quarter, slowing from a 0.9 percent expansion in the previous three-month period. On an unadjusted basis, the economy stagnated, after a 0.8 percent advance in the first quarter.