German, French Economies Grew in Second Quarter (Correct)
Written on August 14, 2009
The German and French economies unexpectedly grew in the second quarter, bringing an end to their worst recessions since World War II.
Gross domestic product rose a seasonally adjusted 0.3 percent from the first quarter, Germany’s Federal Statistics Office in Wiesbaden said today. The French economy also expanded 0.3 percent, Finance Minister Christine Lagarde said. Economists predicted contractions of 0.2 percent in Germany and a 0.3 percent in France, Bloomberg News surveys showed. The euro climbed half a cent to $1.4262.
The resumption of growth in the euro region’s two largest economies makes it unlikely the European Central Bank will add to its stimulus measures. Global measures to revive growth have boosted demand for European exports, while government subsidies and lower interest rates are supporting spending at home. With unemployment rising, the recovery may be slow.
“With Germany and France expanding, there are chances we might see growth in the euro zone as well,” said Ralph Solveen, an economist at Commerzbank AG in Frankfurt. “The recession is over quick cash.”
Eurostat, the European Union’s statistics arm in Luxembourg, publishes second-quarter data for the 16-nation euro region at 11 a.m. Economists had forecast a 0.5 percent decline from the first quarter.
The return to growth in Germany comes as Chancellor Angela Merkel campaigns for a second term in office ahead of national elections on Sept. 27.
“While short-term prospects are good, we can’t exclude an aftershock next year because of unemployment,” Andreas Scheuerle, an economist at Dekabank in Frankfurt, said before today’s report. “Still, the worst should be behind us.”
Germany’s second-quarter expansion was aided by increases in government and private consumption and construction, the statistics office said. Net trade also made a positive contribution as exports declined less than imports, it said. In the year, the economy shrank 5.9 percent when adjusted for the number of working days.
Filed in: money.