Germany’s economy strengthens

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The German economy expanded by 0.75 per cent in the second quarter, its strongest rate in more than two years, but growth will slow in the second half of the year, German Deputy Economy Minister Bernhard Heitzer said.

Europe’s largest economy performed strongly during the early years of the eurozone crisis but only just managed to escape recession in early 2013, when a long, harsh winter dampened construction activity and exports were weak.

Heitzer said strong second-quarter growth was partly due to the construction industry catching up after the long winter.

Germany is due to release preliminary data on gross domestic product (GDP) on August 14 – five weeks before a federal election which is likely to see Chancellor Angela Merkel return to power. The consensus forecast in a Reuters poll is for GDP to expand by 0.6 per cent on the quarter.