German economy slows in third quarter

The German economy has picked up only moderately in the third quarter, the statistics office has reported. Private consumption was the main driver of GDP expansion, while exports suffered from a global trade slump.

The National Statistic Office, Destatis, reported Tuesday the German economy rose by 0.2 percent in the third quarter compared to the previous three months which economists said was "neither good nor bad."

Analysts had penciled in 0.3-percent growth for the July-to-September period, but a slump in German shipments abroad and lower investment by companies in machinery spoiled the overall result.

The moderate expansion of gross domestic product was primarily driven by strong domestic consumption and more government spending on the integration of migrants.

Full-year outlook intact

In the first quarter, the German economy had still grown by 0.7 percent, followed by a 0.4-percent expansion in Q2, Destatis said.

 

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"The third-quarter growth rate is neither exciting nor alarming," VP Bank economist Thomas Gitzel said in a statement. "Early indicators suggest that things are looking up again and that we might well see a stronger performance in the final quarter of 2016."

Both the European Commission and German economists expect the German economy to grow by 1.9 percent on an annualized basis as Britain's pro-Brexit vote is not seen to have any immediate negative impact on Europe's powerhouse.

hg/sgb (dpa, AFP)