German Economy Contracts More Than Estimated In Q2

The German economy shrank more than initially estimated in the second quarter, the latest data from Destatis revealed on Friday.

Gross domestic product fell 0.3 percent sequentially, reversing a 0.3 percent growth in the first quarter. In the flash estimate, the economy showed a contraction of 0.1 percent.

The expenditure breakdown showed that gross fixed capital formation declined 1.4 percent compared to the prior quarter amid a 1.9 percent fall in investments in machinery and equipment. Foreign trade was also not favorable, as exports were down 0.1 percent, while there was a 1.6 percent increase in imports.

Household consumption rose only 0.1 percent, and government consumption was 0.8 percent higher.

On the production side, the construction industry logged a significant contraction of 3.7 percent. The manufacturing sector also faced a setback in the second quarter by shrinking 0.3 percent, and production was down in almost every sector of manufacturing.

On an annual basis, the economy logged a calendar-adjusted growth of 0.2 percent after rising 0.3 percent in the first quarter. The rate of expansion was revised downward from 0.4 percent.

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