Germany GDP growth revised up to 0.3% in Q2

Germany's economy grew 0.3% in the second quarter from the previous three months, revised official data showed on Tuesday, improving on an initial estimate of 0.2%.

Destatis chief Ruth Brand said the economy was maintaining the momentum seen at the start of the year and that growth was mainly driven by exports. Germany's economy had expanded 0.4% in the first quarter.

Exports rose 2% in the second quarter from the first, while imports also rose substantially. Investment fell slightly, pulled down by a fall in machinery and equipment investment. Spending by households and the government both registered small increases.

The figures add to signs that Europe's biggest economy has remained resilient despite pressure from the energy shock linked to the United States and Israel's war against Iran. Factory output and exports have also risen in recent months.

The Ifo business confidence survey released on Tuesday rose for a fourth consecutive month in August to 88.8 points, its highest level in more than a year. KfW analyst Frank Brandmaier said the increase was a major surprise and suggested the positive trend was continuing.

Germany has stagnated for several years because of high energy costs, growing competition from China and US President Donald Trump's tariffs. Hopes for a stronger rebound had been raised by Chancellor Friedrich Merz's planned spending on defence and infrastructure, but the Middle East war has weighed on energy-intensive manufacturers.

The government now expects growth of 0.5% for 2026 as a whole.

ING analyst Carsten Brzeski said the GDP revision was good news and showed the economy had been more resilient than feared. He said German industry benefited because some Asian competitors suffered more from the Middle East war.

Brzeski warned that low water levels on major rivers, continued high oil prices and political difficulty in implementing promised reforms were headwinds for German growth.