Germany leads quickening European economic revival
Germany posted its best quarterly growth since reunification Friday while figures showed the economic recovery gathering pace in France and Spain, leading to a bounce on Europe's main stock markets.
As fears grow the economies of the United States and China are running out of steam, the figures from Europe provided some welcome relief amid predictions that annual growth could be even more impressive.
Even Romania, one of the European countries to be worst hit by the downturn, appeared to have turned the corner, exiting recession in the second quarter after seeing its GDP shrink for the previous six quarters.
Figures from Germany's national statistics office showed Europe's biggest economy thundered ahead at a rate of 2.2 percent in the second quarter from the previous three-month period, and 4.1 percent from the second quarter of 2009.
"The recovery of the German economy, which lost momentum at the turn of 2009/2010, is really back on track," the Destatis office said. "Such quarter-on-quarter growth has never been recorded before in reunified Germany."
Communist East and free-market West Germany unified in October 1990 after a 45-year separation.
Destatis also revised the first quarter growth figure higher to 0.5 percent from an initial estimation of 0.2 percent, the rate seen at the end of 2009.
After suffering its worst post-war recession in 2009, "we are now experiencing XL growth," Economy Minister Rainer Bruederle said.
Analysts polled by Dow Jones Newswires had forecast a second-quarter rise of 1.4 percent and an annualised gain of 2.6 percent.
But while Germany normally relies on exports to underpin growth -- it is the second biggest exporter worldwide after China -- "household and government final consumption expenditure contributed to GDP growth, too", Destatis said.
ING senior economist Carsten Brzeski said Germany was "playing in a league of its own".
"Structurally in a much better shape than many other industrialized countries, it was just a matter of time before the German economy would pick up further speed," he added.
Barclays Capital senior economist Julian Callow said the latest figures put Germany "on track to grow around three percent or even slightly more for this calendar year, significantly stronger than our prior estimate".
France -- Europe's biggest economy after Germany -- experienced a recession last year of 2.5 percent.
But the country's finance minister said on Friday that it recorded economic growth rate of 0.6 percent in the last three months, compared with 0.2 percent in the first three months of the year.
Speaking on Europe 1 radio, Christine Lagarde also said 35,000 jobs had been created in the second quarter, but indicated that a forecast of 2.5 percent growth in 2011 would remain unchanged.
President Nicolas Sarkozy's government is expecting growth of 1.4 percent for the whole of this year.
The news was warmly welcomed by investors at the start of trading on Europe's stock markets.
In initial deals, Frankfurt's benchmark DAX 30 index of top shares gained 0.46 percent to 6,163.11 points, London's FTSE 100 climbed 0.66 percent at 5,300.93 points, and in Paris the CAC 40 added 0.81 percent to 3,650.46.
Other countries to fuel the sense of optimism included the Netherlands where official figures showed GDP grew 0.9 percent in the second quarter while Austria's economy grew by 0.9 percent.
Spain, which only came out of recession in the first quarter with a 0.1 percent spurt, released figures showing its economy grew 0.2 percent in the second quarter.
Romania, which has implemented draconian spending cuts in order to grasp a 20 billion euro lifeline from the European Union and International Monetary Fundt, posted a quarterly growth rate of 0.3 percent.
Romania had previously seen its GDP shrink for six quarters in a row, as it faced one of the worst recessions of any EU member state.
© 2010 AFP