The German economy grew more than expected in the second quarter of the year with a GDP increase of 0.3% compared to the previous quarter, the Federal Statistical Office (Destatis) reported this Tuesday. This is one tenth more than initially estimated by the agency. “The growth dynamics of the German economy since the beginning of the year continue. As in the first quarter, the increase was mainly due to the good performance of exports,” explains Ruth Brand, president of Destatis, in a press release.
The data also confirms that, despite the instability caused by the war with Iran and the rise in energy prices, Europe’s largest economy has maintained consecutive growth in the last three quarters. This means that, according to the public institution, the overall economic outlook of the country is slightly better than in the preliminary GDP report.
In light of the new figures, sales in wholesale and retail trade performed notably better than expected. At the same time, the available information on goods trade in June 2026 points to a significant increase in exports.
As at the start of the year, foreign trade in the second quarter of 2026 grew strongly, once adjusted for prices, seasonality, and calendar effects. Thus, 2% more goods and services were exported in total than in the first quarter of 2026, good news for a German economy whose growth for decades has relied on sales to other countries. The improvement between April and June was mainly due to goods exports, which increased by 2.6%. In contrast, service exports remained unchanged compared to the previous quarter.
Regarding imports, a similar picture was observed. While goods imports increased significantly by 2.1%, service imports grew more moderately (0.3%). Overall, with adjustments for currency changes, seasonality, and calendar, imports increased by 1.5% compared to the first quarter.
Still below the European standard
Despite the small positive news from Tuesday’s data for an economy in need of it, in the international comparison Germany’s growth remains below the European average. Across the European Union, GDP grew by 0.5% in the second quarter, according to the latest Eurostat figures. And it cannot be concluded that the traditional European locomotive pulled the eurozone, whose growth was 0.4%.
Among the major community economies, Spain was, between April and June, as in previous quarters, the country with the highest GDP growth (0.7%). In France and Italy, performance was somewhat weaker than Germany’s (0.2% in both cases).
Business confidence rises
But in any case, the improvement in the situation reflected by the data is beginning to be felt somewhat in the German productive fabric. The prestigious Ifo Institute, the country’s most influential analysis center, based in Munich, also reported this Tuesday an increase in business confidence. The indicator compiled by this independent institution rose in August to 88.8 points, compared to 86.7 in July.
“Companies were more satisfied with their current situation and significantly revised their expectations upwards. Uncertainty continued to decrease. Despite the new rise in energy prices, the German economy is recovering,” the Ifo said in a statement.
The index experiences a particularly pronounced rise in the manufacturing sector, according to the economic institution. In this sector, companies expressed dissatisfaction only with order books; however, managers view their current activity and future expectations more positively.
“There are still no signs that the low water levels of the Rhine have a negative impact on the industry,” said Klaus Wohlrabe, deputy director of the Ifo, although the Bundesbank (central bank) has stated that the low water levels in the country’s most important river are indeed a brake on recovery.
According to the latest monthly report from the German central bank (whose main competences have been delegated to the European Central Bank since the adoption of the euro), the shortage of navigable transport routes on the Rhine and other waterways, combined with the sharp increase in transport costs, will significantly affect industrial production and export growth. The institution forecasts that gross domestic product will “increase, at best, only slightly.” The Ifo sees possible economic growth of around 0.2% or 0.3% of GDP in the current quarter.
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