German economy bounces back as exports boom

Germany's economy grew at 2.2 per cent - the fastest quarterly rate of growth post unification - in the second quarter (April-June 2010) helped by a surge in exports and a recovery in industrial production.

The German economy grew 4.1 per cent year-on-year in the second quarter against a 2.1 per cent GDP growth in the January-March quarter.

Germany's exports were boosted by a weak euro, which has fallen nearly 10 per cent against the US dollar since the start of the year. This has made German goods cheaper outside the euro zone.

Germany's gross domestic product (GDP) grew 2.2 per cent in April-June 2010 against a first-quarter growth of 0.5 per cent (revised from 0.2 per cent previously), official data showed.

The second quarter economic performance was far above the government's own forecast of 1.4 per cent, economy minister Rainer Bruederle said.

With continued improvement in industrial production and exports in the next two quarters, the German economy is now expected to grow at a rate above three per cent this year.

Almost 23 of the 30 DAX companies reported better-than-expected second-quarter results while 12 raised their immediate performance outlooks.

The German economy reported a more than 3 per cent annual growth in 2006, when it expanded by 3.4 per cent.