German economy expands by 0.7% in Q2

German economy was gaining momentum in the second quarter of 2013, with its gross domestic product increasing 0.7 percent, beating economists' expectations, preliminary official data showed on Wednesday. In seasonally and calendar-adjusted term, German economy between April and June expanded by 0.7 percent compared with the previous quarter, which saw a stagnation of the Europe's largest economy, according to German Federal Statistical Office. "Positive contributions were made mainly by domestic demand," said theWiesbaden-based office, adding that both private consumption and public spending were up in the second quarter. Following a contraction in the last quarter of 2012, German economy was expected to return to its growth track this year. Domestic demands were expected to be the main growth engine, thanks to the moderate inflation, stable labor market and historically low interest rate in the euro zone. Bundesbank, Germany's central bank, expected German economy to grow by 0.3 percent in 2013, and by 1.5 percent next year. According to provisional calculations, the GDP in the second quarter was achieved by 41.8 million persons in employment in the domestic territory, which was an increase of 242,000 persons or 0.6 percent year on year. Investment during the second quarter also increased due to a weather-related catch-up effects following the unusually long and cold winter, said the statistical office. Net exports, too, contributed to the GDP growth. Detailed results were scheduled to be released on August 23. The Statistical Office on Wednesday also adjusted the growth rate in the first quarter to 0.0 percent from the 0.1 percent as previously reported, following a 0.5 percent decrease of GDP in the last quarter of 2012. GDP growth in the second quarter exceeded forecasts of economists, who had expected the economy to expanded by 0.6 percent, and boosted optimism that it would lead the euro zone out of recession sooner. On Tuesday, Mannheim-based ZEW Centre for European Economic Research released its latest economic sentiment indicator, showing that investors in August had the strongest level of confidence since March 2013 on the outlook of German economy. Recent figures of industry production, labour market and consumer confidence were also upbeat.