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Germany sees increase in GDP

Germany sees increase in GDP

The ongoing debt crisis in the eurozone is not stopping the economy in Germany from expanding, new figures have revealed.

According to official data, gross domestic product (GDP) in the European country went up by 0.3 per cent between April and June 2012.

While this is down on the 0.5 per cent growth recorded in the previous quarter, it indicates that Germany is managing to avoid the declines seen in many other eurozone members.

As a result, investors who are planning to transfer money overseas could view it as a relatively safe option amid the continuing economic turmoil across the continent.

Carsten Brezeki, an economist at ING, described Germany's economy as the "stronghold of the eurozone".

"However, another strong quarter glosses over the fact that even the stronghold has already caught the euro crisis virus," he commented.

Mr Brezeki warned that conditions may not be so favourable later in the year, as order books and inventories are thinning "very rapidly".

Aline Schuiling of ABN Amro added that Germany cannot singlehandedly sustain the entire eurozone.

She predicted that GDP in the financial bloc will contract by approximately 0.4 per cent this year, despite the "positive growth number for Germany".

Ms Schuiling said this is likely because "severe fiscal austerity is pulling most economies into recession".

Germany's Federal Statistics Office credited the continued increase in GDP during the second quarter of the year partly to its export and import market.

Indeed, it noted that between April and June, exports went up at a higher rate than imports, while domestic consumption also increased during this period.

Figures showed that Germany's GDP in the second quarter of 2012 also compared favourably with the amount recorded in the corresponding quarter of 2011, as the economic growth rate was 0.5 per cent year-on-year.

The statistics office acknowledged that this increase is "relatively small". However, this was said to be partly because the "calendar effect" meant there was one extra working day during the second quarter of 2012, which means the potential for generating economic output differed slightly in both periods of time.

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