German GDP growth revised upwards, defying Iran war turmoil
According to the statistics office Destatis, GDP grew 0.3% from April to June compared with the first three months of the year.
German economic growth proved stronger than initially believed in the second quarter, defying the chaos caused by the Iran war, according to revised government data. The statistics office Destatis reported that gross domestic product (GDP) expanded by 0.3% from April to June compared with the previous quarter, higher than the initial estimate of 0.2%.
Chief statistician Ruth Brand noted that the momentum was primarily driven by a surge in exports. The economy grew 0.4% in the first quarter, and the upward revision to second-quarter growth suggests that Germany, Europe's largest economy, may be coping with the energy shock from the US and Israel's war in Iran better than initially feared.
Despite the conflict, factory output and exports have continued to rise, even as imports also increased substantially. Manufacturing output and exports remained robust in recent months, even amid the fallout from the Middle East conflict. While investment dipped slightly, primarily due to a sharp decline in machinery and equipment, household spending and government expenditure both saw modest increases.
The German economy has struggled in recent years due to high energy prices, intense competition from China, and former US President Donald Trump's tariffs. Initial hopes at the beginning of the year for a robust economic rebound under Chancellor Friedrich Merz's plans to boost defense and infrastructure were dampened by the war's impact on energy-intensive industries. The government now anticipates a modest 0.5% growth for the entire year of 2026.
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