German economy grew less than expected in Q3, statistics office says
4:13 am Friday, November 22nd, 2024
By Maria Martinez
BERLIN (Reuters) – Germany’s economy grew less than previously estimated in the third quarter, the statistics office reported on Friday, in further bad news for a country set to be the worst performer among the Group of Seven rich democracies this year.
Gross domestic product grew by 0.1% in the third quarter of 2024, the data showed, compared with the previous quarter, down from a preliminary reading of 0.2% growth.
“The German economy barely moved forward in the third quarter, continuing the trend of virtually no growth in the eurozone’s largest economy,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.
Germany has lagged the European Union average since 2021 and is expected to shrink for the second year running in 2024.
A recession is normally defined as two consecutive quarters of economic contraction and data from the second quarter had spurred recession fears with a 0.3% contraction.
“Even if the German economy avoided a summer recession, a winter recession is looming,” said Carsten Brzeski, global head of macro at ING.
Household consumption rose 0.3% quarter-on-quarter and government spending was up by 0.4%, while investment fell by 0.2% in machinery and equipment, and by 0.3% in construction.
Looking ahead, there is room for growth in consumers’ spending to continue given solid real income growth and a high savings rate, Vistesen said.
Exports of goods and services were down 1.9% from the second quarter, with exports of goods, in particular, falling substantially by 2.4%, the statistics office said.
“Looking beyond the winter, the German growth outlook will heavily depend on the new government’s ability to strengthen the domestic economy amid a potential trade war and even stronger industrial policies in the U.S.,” Brzeski said.
(Reporting by Rachel More and Maria Martinez, Editing by Miranda Murray and Gareth Jones)
