German Economy Stagnates In Q2

(RTTNews) - The German economy stagnated in the second quarter as growth in household and government spending was offset by the weaker foreign trade, official data showed on Friday.

Gross domestic product remained flat in the second quarter, following a revised growth of 0.8 percent in the preceding quarter, Destatis reported.

GDP was expected to gain 0.1 percent after first quarter's initially estimated 0.2 percent growth.

Household consumption and government spending supported growth, whereas exports and imports had a downward effect on economic growth, Destatis said. Detailed results for the second quarter will be released on August 25.

Price-adjusted GDP grew 1.5 percent from the second quarter of 2021, when the German economy had been markedly affected by the consequences of the third wave of the Covid-19 pandemic.

This was followed by a 3.9 percent expansion in the first quarter. Economists had forecast an annual growth of 1.8 percent. On a calendar-adjusted basis, GDP grew 1.4 percent, much weaker than the 3.6 percent growth logged in the previous quarter.

The Covid-19 pandemic, interruptions in supply chains and the war in Ukraine, clearly weighed on economic activity.

Germany's unemployment increased in July as fears of an impending recession dampened job creation.

The unemployment rate rose slightly to 5.4 percent in July, in line with expectations, from 5.3 percent in June, the Federal Employment Agency said.

The number of people out of work increased 48,000 from June, when unemployment surged 132,000. Economists had forecast an increase of 15,000. Elsewhere, the French economy rebounded more than expected in the second quarter driven by foreign demand and investment.

The statistical office Insee said France's GDP grew 0.5 percent in the second quarter, reversing the first quarter's 0.2 percent fall. GDP was forecast to grow 0.2 percent.

Eurostat is scheduled to issue GDP data for the euro area at 5.00 am ET. The currency bloc is expected to expand 0.2 percent sequentially in the second quarter, following a 0.6 percent rise a quarter ago.