The ongoing debt crisis in Europe is a major reason for the slowdown, and will remain the biggest concern going forward. There have been warnings that German exports were vulnerable if the euro zone crisis spread from the GIIPS to the core nations, and a rise in private consumption would not balance out a likely year-on-year fall in the contribution from net exports. With contagion spreading and now even France under suspicion, expect markets to be even more sensitive than usual about Germany’s economic health.
German Economic Growth Slows in Second Quarter
German gross domestic product growth slowed more than expected in the second quarter, dropping to 0.1 percent in seasonally adjusted terms from a revised 1.3 percent in the first three months of the year, data showed.
The unadjusted preliminary data from the Federal Statistics Office released on Tuesday also showed that growth eased to 2.8 percent compared to the same quarter a year earlier, after 5.0 percent in the first three months of the year.
The figures compared to Reuters consensus forecasts for a 0.5 percent expansion in quarterly terms and a 3.2 percent rise year-on-year.
Quarterly growth was at its lowest since it posted a negative reading in the first quarter 2009.
Quarterly growth had been initially reported at 1.5 percent for the first quarter.
The statistics office said that data dating back to 1991 had been revised as part of a wide-reaching revision conducted every five years.
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