Germany Posts Budget Surplus, but GDP Growth Slows

German gross domestic product (GDP) rose 0.3% in the second quarter of 2012, following a 0.5% increase in the previous quarter, according to data from the Federal Statistics Office. This result was in line with analysts expectations.

Compared with the previous year, German GDP increased 0.5% in the second quarter, after growing 1.7% in the first quarter.

The nation’s economic expansion in the quarter was driven by exports and household spending, the data shows,  which offset the drop in capital demand and construction spending. Exports rose 2.5% from the first quarter and private consumption increased 0.4%.

The Federal Statistics Office also said German the budget balance posted a surplus of 8.3 billion euros ($10.4 billion), worth 0.6% of GDP, in the first half of the year. This was the first time since the first half of 2008 that the nation’s public finances have been in the black.

Meanwhile, the Markit preliminary composite purchasing managers’ index (PMI) for Germany indicated that private sector output fell at faster rate during August, as a renewed contraction in services offset slower drop in manufacturing activity. The 47.0 reading, down from 47.5 in July, signaled the steepest rate of private sector output contraction since June 2009.

Earlier this week he Bundesbank warned that growth may slow further in the second half due to prevailing uncertainty.