October 23, 2007	Tuesday	Shawwal 10, 1428

FRANKFURT, Oct 22: German growth was back on track in the third quarter, boosted by exports and a strong industrial performance after a second quarter slowdown, the Bundesbank said in its monthly report on Monday.

“The economy had a higher growth rate in the summer months compared with the average achieved in the first semester (half) of the year,” the German central bank said, without giving figures.

In the second quarter, gross domestic product (GDP) rose 0.3 per cent compared to the first quarter, its worst performance since the final three months of 2005. GDP growth in the first quarter of 2007 was 0.5 per cent.

The Bundesbank said economic activity had picked up significantly in the summer after the effects of higher value-added taxes and weakness in the construction sector took their toll on first-half growth. “In the third quarter, these effects have diminished so that the cyclical forces of recovery are again back to the forefront,” it said. Germany, the largest Eurozone economy, raised value-added tax to 19 per cent from 16 per cent in January.The report said companies had taken advantage of the euro’s strength against the dollar to buy imports during the third quarter.

The government is due to publish its own updated growth estimates on November 14.They currently stand at 2.3 per cent for this year and 2.4 per cent in 2008.Leading German economic think-tanks last week raised their growth forecast for this year to 2.6 per cent from 2.4 per cent but cut their estimates for 2008 to 2.2 per cent from 2.4 per cent. —AFP