German GDP Falls .2% In Q2--Federal Statistical Office (Destatis)

The German economy contracted .2% in the second quarter of 2014 according to the Federal Statistical Office (Destatis). The largest and most powerful by GDP, German’s numbers are considered a critical marker to the entire Eurozone’s economic performance. Germany is also the world’s 4th largest economy after the U.S., China, and Japan.

The official announcement:

The German economy is losing momentum. In the second quarter of 2014, the gross domestic product (GDP) decreased 0.2% on the previous quarter after adjustment for price, seasonal and calendar variations; this is reported by the Federal Statistical Office (Destatis). However, one of the reasons probably was the extremely mild weather leading to high growth rates at the beginning of the year. According to the most recent calculations, the German economy had grown by 0.7% in the first quarter of 2014; in the last quarter of 2013, the GDP had been up 0.4% on the previous quarter. These results are based on the new ESA 2010 methodology for the first time.

The aggregates responsible for the slight GDP decrease in the second quarter of 2014 were, according to provisional calculations, foreign trade and capital formation. In a quarter-on-quarter comparison, the increase in exports was smaller than the increase in imports, so that the balance of exports and imports had a negative effect on the German economic development. Also, capital formation, especially in construction, fell markedly, one of the probable causes being anticipatory effects due to the unusually mild winter of 2013/2014. However, both households and government consumed slightly more than in the previous quarter.

Compared with the previous year, the German economy lost momentum, too, but continued to grow. The price-adjusted GDP in the second quarter of 2014 was up by 0.8% (1.2% when calendar-adjusted) on the second quarter of 2013.