German consumption helps boost economic growth
August 25, 2010 - 0:0
FRANKFURT (AFP) -– The German economy got help from exports, investment and domestic consumption to post record second-quarter growth, detailed data released Tuesday by the national statistics office showed.
Dynamic activity in Germany contrasts with a loss of momentum in the United States, the world's biggest economy, and a slowdown in number two China.The Destatis office confirmed an earlier growth estimate of 2.2 percent from the previous three-month period, an all-time high for reunified Germany, and noted that household consumption had contributed to the result.
It was the first time in a year that consumer spending showed an increase, and could ease pressure on Germany, which has been criticized by some EU leaders for relying too much on exports to drive its economy.
""If German demand picks up and spills over to other countries, it could help reduce imbalances in the eurozone,"" European Economic Affairs Commissioner Olli Rehn said Tuesday in the business daily Handelsblatt.
The ""German consumer sent a strong sign of life … after three consecutive drops, this was the first private consumption growth since the end of the car scrap scheme"" in 2009, ING senior economist Carsten Brzeski said.
The ""recovery seems to be more self-sustained than some observers had thought,"" he said.
Destatis also confirmed a 12-month growth rate of 4.1 percent in the second quarter, and the head of the German Chamber of Commerce and Industry (DIHK) said it now expects the economy to grow by a record 3.4 percent this year.
In October, the government in Berlin will revise higher its previous 2010 forecast of 1.4 percent growth, officials have indicated.