Tuesday, August 25, 2009

The German GDP Recovery

Bloomberg details:

Government spending lifted Germany out of its worst recession since World War II, a breakdown of second-quarter gross domestic product shows.

Government spending rose 0.4 percent from the first quarter and helped to boost private consumption, which gained 0.7 percent, the Federal Statistics Office in Wiesbaden said today. Construction investment increased 1.4 percent. GDP advanced a seasonally adjusted 0.3 percent, the office said, confirming an initial estimate from Aug. 13. The unexpected return to growth in Europe’s largest economy followed four quarters of contraction.

While consumption and government spending did grow at 0.7% and 0.4% respectively, as we can see below, they are such a small part of German GDP that they really were not the driver of economic growth. The real impact came from an increase in net exports (exports declined, but by a smaller -1.2% QoQ drop than the -5.1% drop in imports).

In other words, it may have been government spending that helped Germany out of recession, but possibly not theirs.

Source: Destatis


  1. That has to be firmly tongue in check, right ? What's our import of German cars? But interesting. Looks like they're setting up for a massive inventory re-build but evern more interesting would be the question of who's buying their stuff when clearly their own drop in imports signals a weak economy. Hmm...German's an export based economy that sells to Japan, China and Brazil. Too bad we can't see a nice datarich spider web of trade flows.

  2. firmly.

    cFc didn't even exist as of that point.

    likely more of a result of the chinese stimulus than the u.s. if it were from the government spending side