German economy sees 'record' growth of 2.2%

The German economy grew by 2.2% in the three months to the end of June, its

fastest quarterly growth in more than 20 years, official figures show.

"Such quarter-on-quarter growth has never been recorded before in reunified

Germany," the national statistics office, Destatis, said.

The main reason for the higher-than-expected growth was strong exports, helped

by a weaker euro.

The eurozone economy grew by 1% during the quarter.

This compares with growth of 0.2% in the first three months of the year, the

area's official statistics agency, Eurostat, said.

Analysis

BBC Europe business reporter Ben Shore

Ben Shore Europe Business Reporter, BBC News, Brussels

Not since the Berlin Wall divided the country has Germany seen growth of 2.2%

in a single three-month period.

The German statistics agency says the numbers can partly be explained by a

sustained period of export growth, as Germany's immense manufacturing sector

begins to recover the markets it lost in 2009.

But the most surprising element of the numbers is an apparent contribution from

the German consumer. They have traditionally been very cautious in their

spending habits, but appear in 2010 to have finally opened their wallets with

gusto.

France's figure of 0.6% growth in the period from April to June is also

significantly better than economists had expected, raising hopes that Europe

may be emerging from the gloom of the last three months, a period when many

contemplated the end of the euro currency as rioters took to the streets of

Athens.

The French economy grew by 0.6% in the second quarter, also up from 0.2%, while

the Spanish economy grew by 0.2%, compared with 0.1% in the previous three

months.

The pace of growth in the Italian economy remained the same, at 0.4%.

The eurozone quarterly GDP figures show that the economic recovery in Europe

gained pace between April and June. The UK has also reported

higher-than-expected growth of 1.1% for the period.

In the US, however, second quarter growth was 0.6%, down from 0.9% between

January and March, raising questions about the strength of the recovery in the

world's biggest economy.

'Rapid recovery'

Destatis also revised up the German growth figure for the first three months of

the year, to 0.5% from 0.2%.

As well as the "strong contribution" from exports, the office said household

and government spending also helped to boost growth in the second quarter.

"The German economy is recovering rapidly," Destatis said.

Analysts had expected strong growth of about 1% to 1.5%.

"The strong second quarter performance of the German economy is impressive but

not surprising," said Carsten Brzeski at ING Financial Markets.

"The German economy mainly benefited from two factors - a catching up in the

construction sector after the harsh winter and strong foreign demand for German

goods."

Despite the strong figures, economists do not expect the German economy to

continue growing at such a fast pace.

"Looking ahead, it is almost needless to say that the current growth momentum

is hardly sustainable in the coming months. With the one-off impact from the

construction sector and normalising of export growth, German growth will return

to more ordinary numbers," Mr Brzeski said.

The German Economy Minister, Rainer Bruederle, said the latest quarterly GDP

figures "make growth of well above 2% possible for 2010".