Solid German growth gives Merkel election tailwind

Strong household and state spending consolidated Germany's role as the euro zone's growth engine in the second quarter, helping Chancellor Angela Merkel to burnish her economic credentials less than six weeks before an election.

Tuesday's data are the last major growth figures to be published before the Sept 24 vote, in which Merkel is seeking to win a fourth term.

Merkel's conservatives enjoy a comfortable lead over the Social Democrats (SPD), their current coalition partner; an INSA poll on Tuesday put their support at 37 per cent to the SPD's 25.

Yet while neither party wants another grand coalition, a fractured political landscape could make it hard to form another viable alliance.

In the second quarter, Germany's seasonally adjusted gross domestic product (GDP) was up 0.6 per cent from the previous quarter - just below the consensus forecast of 0.7 per cent in a Reuters poll, but still the 12th consecutive quarterly growth reading.
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