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Thursday, August 14, 2008

The German Economy Contracts In Q2 2008

The German economy shrank in the second quarter of 2008 for the first time in almost four years. German gross domestic product (GDP) was down by 0.5% on the first quarter of 2008 taking into account price, seasonal and calendar adjustments. In the first three months of the year, the GDP was up a revised 1.3%. The last time the German economy had a quarter on quarter decrease was in the third quarter of 2004 (–0.2%).

As further reported by the Federal Statistical Office, the main trend in the second quarter for decreasing household final consumption expenditure and smaller fixed capital formation. Especially capital formation in construction was markedly down on the first quarter. Foreign trade continued to make a positive constribution, although in Q2 this was mainly due to a significant decrease in imports.

GDP was up 3.1% in the second quarter of 2008 compared with the same quarter a year earlier. When calendar adjusted, the growth rate was 1.7% as the reference quarter had three more working days than the second quarter of 2007.

In the second quarter of 2008 there were 40.2 million persons in employment, which was an increase of 566,000 persons or 1.4% on a year earlier.

In addition to the first calculation of data for the second quarter, the published results for the last four years (from 2004) have been revised by the Federal Statistics Office, as happens every year in August. Such continuous revisions are carried out routinely to integrate newly available statistical information into the calculations.

The complete basic statistics required for a “final” calculation of national accounting data generally are available only after about four years, so that only then are the results final and do no longer have to be revised on a regular basis.

The current recalculations resulted in rates of change of the annual and quarterly GDP (unadjusted figures) which differ from the previously published results by up to 0.2 percentage points. The rates of change of the seasonally and calendar adjusted quarterly results were revised by up to 0.3 percentage points. The Federal Statistical Office will release detailed results on 26 August 2008.

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