Germany’s economy expanded unexpectedly in the third quarter underpinned by private consumption, flash data from Destatis showed on Friday.
The biggest euro area economy logged a quarterly growth of 0.3 percent, confounding expectations for a contraction of 0.2 percent. The pace of growth was faster than the 0.1 percent rise posted in the second quarter.
Destatis said the economy managed to hold its ground despite difficult framework conditions of the global economy, with the continuing Covid-19 pandemic, supply chain interruptions, rising prices and the war in Ukraine.
Gross domestic product, on an unadjusted basis, climbed 1.1 percent annually, slower than the preceding quarter’s 1.7 percent growth and economists’ forecast of 0.7 percent.
The calendar-adjusted GDP growth slowed to 1.2 percent from 1.6 percent.
The statistical office cautioned that due to the continuing Covid-19 crisis and the impact of the war in Ukraine, these results are subject to larger uncertainties than usual.
Destatis is set to release detailed GDP data on November 25.
Bundesbank said the German economy is probably on the brink of a recession. In the October monthly report, the bank said the economic output could fall significantly overall in the fourth quarter of this year and in the first quarter of 2023.
A week ago, Fitch Ratings maintained Germany’s coveted AAA ratings, citing diversified, high value-added economy with strong institutions and sound public finances.
But the rating agency downgraded Germany’s GDP growth projection for this year and next, to 1.4 percent and -0.5 percent, respectively.
Fitch forecast an economic contraction during the 2022/2023 winter due to the severe energy shock triggered by the war in Ukraine, while growth is further weakened by slower growth in China, which is Germany’s second-largest export market.
Data released earlier on Friday showed that France and Spain posted slower economic growth in the third quarter on weak foreign demand. The French GDP grew only 0.2 percent from the second quarter, when the economy expanded 0.5 percent.
Spain’s quarterly economic growth also eased to 0.2 percent, down sharply from 1.5 percent in the second quarter.
In the latest World Economic Outlook Report, released on October 11, the International Monetary Fund said Germany and Italy are forecast to post economic contractions next year.
The Washington-based lender forecast Eurozone to witness the most pronounced slowdown as the energy crisis caused by the war in Ukraine continues to take a heavy toll, damping growth to 0.5 percent in 2023.
Eurostat releases euro area GDP for the third quarter on October 31.
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