Germany posted a budget surplus during the first half of the year as the nation’s economy rebounded during the second quarter, final data released on Friday showed.
The latest economic data is likely to boost Chancellor Angela Merkel’s hopes of securing a third term at elections due on September 22.
Gross domestic product (GDP) expanded by a solid 0.7 per cent quarter-on-quarter in the three months to the end of June, as a strong pickup in consumption and investment powered economic growth, the Federal Statistics Office said as it confirmed preliminary estimates.
GDP had stagnated in the first quarter after contracting by 0.5 per cent in the final three months of 2012.
“The German economy is gaining momentum, following a weak start into the year,” the statistics office said.
The acceleration in Europe’s biggest economy, as well as moderate unemployment, has helped swell government coffers, with the country turning in a budget surplus of 0.6 per cent of GDP in the first half of the year.
The German data contrasts with large parts of the 17-member eurozone, which are struggling to cut high deficits amid weak growth and high jobless numbers. Euro members are required to meet a budget deficit target of no more than 3 per cent of GDP.
Helping to drive second-quarter German growth was a 2.6-per-cent surge in the building industry, which had been badly hit by Europe’s protracted winter weather.
While second quarter consumer spending went up by 0.5 per cent, Government spending rose 0.6 per cent, the statistics office said.
Capital investment rose 1.9 per cent between the end of March and June, with corporate investment in machinery and equipment climbing 0.9 per cent.
Reflecting the recent uncertain performance of the global economy and the recession in the eurozone, foreign trade contributed only 0.2 per cent to the nation’s growth performance.
Nevertheless, the solid set of Q2 numbers open the way for economists to consider revising up their growth outlook for Germany.
Data released this week have pointed to stronger-than-forecast economic indicators for the eurozone and China, as well as promising figures from the world’s biggest economy, the US.
“German confidence is not only benefiting from strong domestic economic activity and hopes of a soft and not a hard landing of emerging economies, but also from the latest improvements in the eurozone,” said ING Bank economist Carsten Brzeski.
The German economy expanded by 0.5 per cent when adjusted for working days in the second quarter, when compared with the same period last year.