GERMAN FINANCE WARNING: Economy growth expectations missed as imports outweigh exports
11:53, Wed, Aug 16, 2017
The eurozone powerhouse saw GDP expand by 0.6 per cent between April and June, according to the Federal Statistics Office.
But economists had been expecting growth of 0.7 per cent.
Growth was largely driven by household and state spending as well as company investments.
However, surging imports jumped higher than Germany exports amid a strengthened euro.
This is a trend which could continue in the coming months after the eurozone currency hit a two and a half year high against the US dollar.
ING Bank analyst Carsten Brzeski warned the main supports to the German economy, such as rising employment, rising wages and increased government spending, is to remain but could lose some momentum in the coming quarters.
It is a similar story for German manufacturing, which is a big driver of the economy and has benefitted from a weak euro in recent years.
Mr Brzeski said: "The same holds for the export sector, where a stronger euro, weaker-than-expected US growth and Brexit uncertainty could take some wind out of the sails without bringing exports to a halt."
It comes after German exports unexpectedly slowed in June.
The economy is currently under close scrutiny, just six weeks before a federal election where Chancellor Angela Merkel is hoping to win a fourth term.