Germany's Q2 economic growth surpasses initial estimate on exports

BERLIN, Aug 25 (Reuters) - The German economy grew by 0.3% in the second quarter of 2026 compared with the previous quarter, slightly above last month's preliminary reading of 0.2% as exports perked up. 

The statistics office's data on Tuesday further firms up tentative signs of a recovery in Germany's languishing economy.

A widely followed gauge of investor morale rose more than expected last week amid improved company earnings and export orders.

Further evidence of an economic turnaround would be positive for Chancellor Friedrich Merz, who has been sliding in opinion polls and who faces state elections next month that could propel the far-right AfD to power at regional level. 

Higher oil and natural gas prices as a result of the Iran war had hampered a long-awaited recovery in Europe's largest economy. The economy ministry in April slashed its 2026 growth forecast to 0.5% from a previous estimate of 1%.

The ministry said earlier this month that positive momentum was emerging with energy-intensive German manufacturers gaining an edge over Asian rivals who were hit even harder by the Iran war's ripple effects.

The statistics office cited improvements in exports as well as in wholesale and retail trading as reasons behind its revision.

(Reporting by Ludwig Burger, editing by Friederike Heine and Louise Heavens)