- Bundesbank
Growth in Germany, the Euro zone's number one economy, is set to remain solid in the second half of the year supported by both the domestic and export economy, according to the Deutsche Bundesbank estimates. The optimistic outlook comes after Germany reported GDP growth rate of 0.4% in the second quarter, shy of forecasts for 0.5%. Nevertheless, Germany is seen benefitting from big real income gains at home, the Euro area's recovery, the weaker Euro and accelerating growth in the US and UK, two key trading partners, the German central bank said in a monthly economic report. The Bundesbank also expressed confidence in Greece, arguing that the nation's economy would gradually recover, thanks to the bailout, tourism income and investments financed by European structural funds. However, the German central bank was more cautious on China, which unexpectedly devalued its Yuan last week, raising fears that its outlook is worse than earlier expected with growth at its slowest in more than two decades.
Meanwhile, the latest survey of Euro zone trade activities indicated that the weaker Euro supported exporters. Exports jumped 12% to 182.7 billion euros from a year ago, while imports came in at 156.4 billion euros, recording a smaller 7% growth. On a monthly basis, exports increased 1.4% in June, while imports added 1.2%.
© Dukascopy Bank SA