European powerhouse Germany notched up a record government budget surplus in the first half of this year, as well as rebounding to stronger growth in the second quarter, official data showed yesterday.
Federal, state and municipal coffers added together were 48.1 billion euros (US$55.66 billion) in the black between January and June, German federal statistics agency Destatis said, up 18.3 billion euros year-on-year.
“Favorable employment and business developments, as well as a moderate spending policy” contributed to the surplus, which amounted to 2.9 percent of GDP, Destatis said.
The statisticians cautioned that the figure for the first half-year did not necessarily point to a similar overshoot over the full year.
Destatis also confirmed data released earlier this month showing that the German economy expanded by 0.5 percent quarter-on-quarter between April and June, adjusting for price, seasonal and calendar effects.
The strong reading largely dispelled fears of a slowdown in the eurozone engine room after a weaker first three months.
Most of the drivers for higher second-quarter growth were found at home, with households and the state increasing consumption spending, and higher investment in equipment and construction.
Meanwhile, growth in exports was outpaced by growth in imports.
“Defying the often-heard international criticism, the economy is already showing a very balanced growth model,” ING Diba bank economist Carsten Brzeski said.
Meanwhile, tensions between the EU and US President Donald Trump over his “America First” trade policy “were a threat, but did not leave any significant marks on the economy,” he added.
“Obviously, this could change in the coming months” if a fragile trade truce struck with Washington fails to hold, Brzeski said.
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