July 24, 2007	Tuesday	Rajab 08, 1428

FRANKFURT, July 23: Growth of the German economy, the biggest in the 13-country eurozone, slowed in the second quarter because of a slight lull in the construction sector, the Bundesbank said in its monthly report on Monday.

“Overall, current data show that the cyclical upturn in the German economy continued in the spring,” the German central bank wrote.

“However, overall economic growth will not have been as high as at the beginning of the year,” the report cautioned.

While consumer spending quickly recovered from the dent caused by the sharp rise in value-added tax (VAT) at the beginning of the year and exports continued to make a positive contribution to growth, investment activity dipped in what was likely to be a technical reaction to the favourable winter months experienced in sectors such as the construction industry, the Bundesbank said.

German gross domestic product (GDP) expanded by 0.5 per cent quarter-on-quarter in the first three months of this year, substantially slower than the 1.0-per cent growth notched up in the last quarter of 2006.

One of the leading German economic research institutes, DIW, recently said it was forecasting GDP growth of 0.4 per cent in the second quarter of this year, which would represent the slowest rate of growth since the end of 2005. —Reuters