Merkel set to benefit as German economy expands 0.75% in Q2

The German economy probablyexpanded about 0.75% in the second quarter, according to a government estimate.

The Economy Ministry is predicting growth of “about three-quarters of a percent,” according to a person familiar with the forecast, who asked not to be identified because the projection is confidential.

That exceeds the 0.6% median of 46 economist estimates compiled by Bloomberg.

Germany’s Federal Statistics Office will release the data on Wednesday.

Stronger-than-anticipated growth in Germany, Europe’s largest economy, may have lifted the 17-nation eurozone out of its longest recession, confirming what European Central Bank President Mario Draghi described as tentative progress toward a gradual recovery later this year.

Gross domestic product in theregion may have risen 0.2% in the three months through June after shrinking for the previous six quarters, according to a separate survey.

Germany’s economy expanded “markedly” in the second quarter, driven by private consumption and industrial production, the Economy Ministry said last Friday.

The data bodes well for Chancellor Angela Merkel, who is standing for a third term as German leader on Sep 22.

German business confidence improved for a third month in July and factory orders, industrial production and exports all gained in June. Still, the economy is set to slow in the current quarter, the Bundesbank said in its monthly report on July 22.

In June, the Frankfurt-based central bank lowered its growth projection for 2013 to 0.3% from 0.4%, and cut its 2014 outlook to 1.5% from 1.9%.

The ECB predicts the eurozone economy will shrink 0.6% this year, before expanding 1.1% in 2014.