German economic growth accelerated to 0.5 per cent in the second quarter from the previous three months as strong exports offset stagnant domestic demand, the Federal Statistics Office said today.
The increase in gross domestic product, adjusted for seasonal factors and working days, was the strongest since the first quarter of 2001. Year-on-year, second-quarter GDP grew by 2.0 per cent, the Office said.
Adjusted for the number of working days, second-quarter year-on-year growth was 1.5 per cent. Analysts had forecast the economy would grow by 1.4 per cent year-on-year.
The Office confirmed the German economy had grown by 0.4 per cent quarter-on-quarter in the first quarter of 2004.
Mr Gerd Hassel, an economist at ING BHF-bank, said the high cost of oil and a slowdown in global demand could mean that growth in Europe's largest economy had already peaked.
Mr Thomas Hueck, an economist at HVB Group, cited persistent weakness in private consumption as the chief impediment to stronger growth rates. He forecast unadjusted growth of 1.6 per cent this year.
The government is forecasting the economy will grow by 1.5 to 2 per cent in 2004 after it shrank slightly in 2003, the first full year of contraction in 10 years.