German economy grew 1.6% in 2nd quarter, revised upward

Business

BERLIN (AP) — Germany’s economy grew by 1.6% between April and June compared with the previous quarter, a slightly better showing than initially reported, official statistics showed Tuesday.

The gain followed a decline of 2% in the first quarter, the Federal Statistical Office said. In preliminary figures at the end of July, it had reported second-quarter growth of 1.5% following a first-quarter drop of 2.1%.

Those figures fell short of the 2% gain economists had forecast for Europe’s biggest economy. This year’s second quarter saw coronavirus infections flare up again and then decline to a very low level, prompting authorities to relax many restrictions, while the country’s vaccination campaign picked up speed.

At the same time, though, the economy was hit by supply chain problems including disruption caused by a ship blocking the Suez Canal and delays in the production and delivery of microchips. Despite the second-quarter growth, gross domestic product was still 3.3% smaller than in the fourth quarter of 2019, the last before the pandemic hit Europe.

Germany’s central bank, the Bundesbank, said in its monthly report on Monday that it expects the economy to grow “significantly more strongly” over the summer as a result of loosened pandemic restrictions.

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