GDP Gains Continue in Germany, France; Netherlands Growth Pauses

European economies remained firm during the spring, according to "flash" GDP estimates for the second quarter that were released today.

Germany picked up even a bit more growth, advancing 0.5% after 0.4% in Q1 and making the year-on-year gain 2.0%, the strongest since the third quarter of 2000. German statistics officials did not report any details today, but their commentary indicates that foreign demand was once again the driving force. This follows the strong performance of German exports, reported and commented on here two days ago. Domestic demand was little changed, German officials said.

GDP in France grew 0.8% in Q2, according to INSEE's "flash" estimate, the same as in Q1. The resulting year-on-year gain, 2.8%*, would be the best since early 2001. In France, consumers appear to be making a major contribution; separate data on household consumption of manufactured goods shows a second consecutive quarterly surge of nearly 2%, spread across both durable goods and clothing.

Growth paused in the Netherlands in Q2 as GDP fell 0.2% from Q1. Even so, the year-on-year pace reached 1.0%, its best since the middle of 2002. The breakdown reported by Dutch statistics officials shows that private consumer spending flattened in Q2 and both business and government investment dropped. However, investment, particularly in the private sector, had been strong in the prior two quarters. Both exports and imports grew in Q2, with the resulting balance increasing markedly. Thus, while Dutch GDP eased overall, there are still signs that growth remains on a positive, if slow, trend.[Detailed GDP data for France and Germany will be reported on August 20 and 24, respectively.]