Germany economy grew only 0.1% in Q2

FRANKFURT: Germany's economy grew only 0.1 percent in the second quarter from the quarter before in an unsettling sign for Europe's economy.

Until now Germany's economy, Europe's biggest, had been growing strongly despite a government debt crisis afflicting the 17 countries that use the euro.

Germany's state statistical agency said Tuesday that lagging consumer spending and construction investment were factors in the growth slowdown.

The second-quarter figure compares with 1.3 percent growth in the first quarter on strong exports of cars and industrial machinery. That figure was revised down from 1.5 percent in earlier releases.

Top German corporate executives have cautioned that growth could be less impressive in the second half of the year due to volatile raw material prices and economic and financial turmoil over heavy levels of government debt in Europe and the U.S.

The second-quarter figure looked better compared with the same quarter a year ago, rising 2.7 percent.

Slowing growth in Germany weighs on overall growth in the eurozone. A slowdown in the zone's biggest country would give the European Central Bank more reason to avoid more interest rate increases this year.

The weak German figure follows a disappointing U.S. growth rate of an annualized 1.3 percent in the second quarter. European figures are usually given quarter on quarter.

Second-quarter eurozone figures were due out later Tuesday. - AP