German economy expands 0.8% in third quarter

German economy expands 0.8% in third quarter

German economy has in recent years been powered by strong domestic demand, boosted by record low unemployment, low inflation and low energy prices AFP/Odd ANDERSEN

BERLIN: The German economy grew at a faster pace than expected in the third quarter, official data showed on Thursday, as robust foreign demand kept Europe's top economy humming.

Gross domestic product (GDP) expanded by 0.8 per cent between July and September compared with the previous quarter, adjusted for seasonal swings, the statistics office Destatis said in a statement.

"German economic growth continues at a high rate," it said.

The preliminary figure beat expectations, as analysts surveyed by Factset had forecast 0.6 per cent growth.

"Exports were stronger than imports in the third quarter. As a result, net exports had a positive impact on the GDP compared to the previous quarter," according to Destatis.

Government and consumer spending "remained rather stable" in the third quarter, it added, while noting that investments had increased, particularly "in machinery and equipment".

Destatis also revised upwards its first-quarter figure, saying the German economy accelerated by 0.9 per cent in the first three months of 2017 instead of the earlier reported 0.7 per cent.

Second-quarter growth was confirmed at 0.6 per cent.

The German government last month sharply upgraded its full-year growth forecast to 2.0 per cent, up from 1.5 per cent previously.

For 2018, it is pencilling in growth of 1.9 per cent.

Europe's largest economy has in recent years been powered by strong domestic demand, boosted by record low unemployment, low inflation and low energy prices.

But the economy ministry expects domestic consumption to slow down in coming years, while buoyant foreign demand for "made in Germany" goods is once again expected to become the main driver of growth.

Exports are forecast to rise by 3.5 per cent this year and 4.0 per cent in 2018, according to the ministry.

Source: AFP

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