German economy grows despite eurozone crisis

Germany continued to defy the worst of the eurozone crisis as it today announced that its economy had grown by 0.3 per cent in the three months to June.

The figure, which was helped by exports and domestic consumption, was down on the 0.5 per cent recorded for the first quarter. But it is still expected to be one of the strongest figures for the eurozone.

France today announced its economy had recorded zero growth for the third consecutive quarter. The Bank of France has forecast a 0.1 per cent contraction in the next quarter. Carsten Brezeski, from insurer ING, said: “The [German] economy remains the stronghold of the eurozone. However, another strong quarter merely glosses over the fact that even the stronghold has caught the euro crisis virus.

“The safety net of richly filled order books and low inventories has become thinner very rapidly, not boding well for growth in the second half of the year.”

Jörg Kramer, of German firm Commerzbank, said: “Growth turned out to be pretty solid. But this could be the last positive news out of Germany for some time. The German economy could contract in the summer. It is fundamentally in good structural shape, but can’t decouple from the recession in the eurozone, plus the global economy has also shifted down a gear.”

Data from the EU’s statistics office out later today is expected to show the eurozone contracted by 0.2 per cent in the second quarter, compared with zero growth in the first.

Experts continue to cast doubt over Germany’s ability to keep the eurozone out of recession.