Demand drives German economy

Domestic demand drove the strongest German quarterly expansion in more than a year between April and June, fuelling optimism Europe’s largest economy will outperform in 2013 and support the eurozone recovery.

Details, released yesterday, showed a construction flurry after the harsh winter. Firms’ strong appetite for equipment and healthy private consumption all underpinned a 0.7% quarterly rise in GDP.

Analysts said Germany’s bounce-back could prompt upwards revisions to 2013 growth forecasts and support the tentative recovery in the eurozone economy, which returned to growth in the second quarter after 18 months of contraction.