Germany GDP growth was finalized at 1.6% qoq in Q2, revised up from 1.5% qoq. In, seasonally and calendar-adjusted gross value added increased by 1.0%. Individual sectors showed diverging trends: Up 3.8% qoq in public services, education, health; up 1.1% qoq in trade, transport, accommodation and food services; up 0.1% qoq in construction; but down -1.3% in manufacturing.

Comparing with the same quarter a year earlier, GDP grew 9.8% yoy on price-adjusted term, and 9.4% yoy on price- and calendar-adjusted term.

Full release here.

In the monthly report, Bundesbank said German economic output is “likely to rise sharply in summer 2021”, more strongly than in Spring. Industry was unable to take advantage of the growth in Q2 due to increased delivery bottlenecks. But there are initial signs that these delivery bottlenecks are “at least not worsening”. It remains to be seen if GDP could reach pre-crisis level in Summer or not until Autumn.

Inflation is expected to continue to rise in Germany, but then “decrease noticeably again at the beginning of 2022”, as the base effect will then no longer apply. Though, inflation could still be over 2% until mid-2022.

Germany PMI Manufacturing dropped from 65.9 to 52.7 in August, below expectation of 65.0. PMI Services dropped from 61.8 to 61.5, above expectation of 61.0. PMI Composite dropped from 62.4 to 60.6.

Phil Smith, Associate Director at IHS Markit said: “With August’s flash PMI still firmly inside growth territory, the recovery of the German private sector looks to be continuing at a healthy pace. Although growth has slowed down since July, the data are still pointing to a stronger economic expansion in the third quarter than the provisional 1.5% increase in GDP seen in the three months to June.”

Full release here.