RTTNews - The German economy unexpectedly expanded in the second quarter, recovering from the worst recession since the Second World War, official data showed Thursday.

Gross domestic product or GDP rose 0.3% sequentially in the second quarter after adjusting for price, seasonal and calendar variations, the Federal Statistical Office said in its preliminary estimate.

The economy expanded for the first time since the first quarter of 2008. Economists had forecast GDP to fall 0.2%. A detailed report on the second quarter economic performance would be released on August 25.

The statistical office said household and government final consumption expenditure and capital formation in construction made positive contributions to the unexpected economic growth. As price-adjusted imports declined far more sharply than exports, the balance of exports and imports also had a positive effect on GDP growth. However, declining inventories had a negative effect.

Meanwhile, the statistical office upwardly revised its first quarter GDP figure to show a fall of 3.5% instead of a 3.8% drop initially reported.

The biggest Eurozone economy started contracting in the second quarter of 2008 and slipped into a recession in the third quarter. The economy has been in recession till the first quarter of this year.

The German government led by Chancellor Angela Merkel has been pouring billions of euros to shore up the recession-hit economy. Growth in the second quarter would provide relief for Merkel as she faces election in September this year.

The government forecast the economy to shrink around 6% in 2009, but the surprising expansion in the second quarter may force it to reconsider its outlook.

Compared with the previous year, the price-adjusted GDP was down 7.1% in the second quarter. This follows a revised decline of 6.4% in the first quarter.

Upon adjustment for calendar variations, economic performance decreased 5.9% year-over-year, as the reference quarter had three working days less than the same period of the previous year, the statistical office said.

Also on Thursday, French Finance Minister Christine Lagarde said the second-biggest Eurozone economy expanded 0.3% in the second quarter compared to the first.

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