Nuclear exit hits German growth

Germany's decision to exit nuclear power weighed on growth in the second quarter as Europe's biggest economy increased energy…

Germany's decision to exit nuclear power weighed on growth in the second quarter as Europe's biggest economy increased energy imports to compensate for an abrupt drop in domestic generating capacity.

Quarterly gross domestic product growth slowed to 0.1 per cent, today's Federal Statistics Office data showed, confirming initial estimates.

The net trade balance knocked 0.3 percentage points off the overall growth figure as imports rose faster than exports.

"A noticeable effect was felt by the German nuclear exit - power was hardly exported and stronger imports were necessary in order to meet demand," the office said.

Chancellor Angela Merkel took a policy U-turn in the wake of March's Fukushima disaster in Japan, shutting down eight nuclear power plants and saying all the country's remaining nuclear capacity would shut by 2022.

Industry and the country's neighbours had feared the abrupt change of course could raise energy costs and imperil the power supply in Europe's biggest economy.

Germany's economy has been a star performer in the industrialised world since the end of the 2008 financial crisis and has underpinned growth across the euro zone.

But doubts have emerged about how much longer its export-geared economy can sustain its expansion in light of an expected slowdown in key markets abroad.

Reuters