German net exports likely led GDP growth in Q2

In Q2, German GDP grew by 0.44% qoq according to the preliminary release, compared with an upward revised 0.35% in Q1. This week's release will provide the first breakdown of growth, although the flash press released already provided some qualitative information which corroborates the picture we get from monthly data. While consumption is likely to have weakened (to around 0.2% qoq), investment is likely to have been negative, with a strongcontraction in construction, suspects Societe Generale. 

Net exports, in contrast, are likely to have delivered a sizeable contribution to growth as exports to the US and the UK revived in Q2. Overall, these data point to a temporary slowdown in domestic demand, possibly caused by heightened uncertainty over Greece and China. The underlying conditions of robust wage growth, low inflation and low interest rates remain good however, suggesting that consumption and construction should return to more positive numbers in H2, says Societe Generale in a research note.