FRANKFURT -- There is no clear sign yet of the much-anticipated German economic rebound and even recovery of the euro zone's biggest economy remained fragile in the second quarter, the latest data showed.

Nevertheless, the German government insisted its projections of 0.75-percent growth for the whole of 2002 were still intact and prospects were not likely to be derailed by the current flood catastrophe, AFP reported.

According to preliminary calculations by the Federal Statistics Office, German gross domestic product (GDP) expanded by 0.3 percent in the second quarter from the figure for the first quarter, the same modest rate of growth as recorded in the first quarter.

On a 12-month basis, GDP rose by 0.5 percent in the April-June period, after contracting by 1.2 percent in the period from January to March, statisticians calculated.

The government promptly declared that the modest economic recovery seen in the preceding three months was continuing.

"The upward trend remains stable. Indeed, indicators point to an acceleration in economic activity in the second half of the year," the Finance Ministry in Berlin said in a statement.

"Economic developments in the first half support our projection of GDP growth of 0.75 percent for the whole of 2002," it said.

The Statistics Office calculated that GDP contracted slightly by 0.4 percent in the first six months as a whole.

The Finance Ministry added that the current flood disaster in the east of Germany would not cloud economic prospects in general.

"The shortfalls in production in the short term will be offset by increased demand as the damage from the flooding is cleared up and repaired," it predicted.

Headline GDP growth in the second quarter was slightly better than expected.

And analysts were also pleased by the fact that first-quarter GDP growth had been revised upwards slightly to 0.3 percent quarter-on-quarter from an original estimate published in May of 0.2 percent.

But a closer look at the figures revealed a more ambivalent picture.

On the positive side, exports increased by 1.1 percent quarter-on-quarter in the period from April to June on continued foreign demand for German-made goods and domestic demand also appeared to pick up with imports rising by 1.5 percent.

Consumer spending, too, appeared to turn around, rising by 0.2 percent quarter-on-quarter for the first time in a year. But that was offset by lower government spending and a decline in capital investment.

"The details of the report are actually less encouraging," than the headline figure might first appear, said Morgan Stanley economist Elga Bartsch.

Economists agreed that the current flood catastrophe was likely to dent economic activity in Germany in the immediate term.

"Life has come to a standstill in the flooded areas of the country, so there might be small potential downside risks to third-quarter GDP which we expected to show growth of 0.4 percent," said Bartsch.

Over the medium term, however, the need to rebuild structures damaged by the floods "should be a small positive for overall GDP growth and I'm expecting the growth to pick up to 2.1 percent next year," she concluded.