Exports, consumption drive meager German growth in third quarter
By Annika Breidthardt and Michelle Martin | November 23, 2012 7:00 PM EST
Exports and private consumption helped Germany to keep growing in the third quarter of 2012, albeit at a slower rate than previously, as Europe's largest economy felt the pinch of the euro zone crisis.
The Federal Statistics Office on Friday confirmed its initial estimate that German gross domestic product growth slowed 0.1 percentage points to 0.2 percent in the three months to end-September.
The breakdown showed exports supported growth in the third quarter, rising 1.4 percent, while government spending gained 0.4 percent and private consumption was up 0.3 percent.
Germany held up strongly during the first two years of the debt turmoil that has hammered Europe but a slide of a number of the continent's economies into recession and a worsening global outlook has prompted companies to hold off on investments.
The seasonally-adjusted data showed gross capital investment made no contribution to German growth in the third quarter.
"Businesses are investing less in machines and other equipment. The only explanation for that is a crisis of confidence - which means the German economy will lose more speed," said Holger Schmieding of Berenberg Bank.
"The tough savings measures in southern Europe, weaker growth in China and uncertainty over the euro crisis are all contributing factors," said Schmieding.
Economists expect a contraction in the fourth quarter but forecast Germany will avoid a recession - defined as two consecutive quarters of quarter-on-quarter falls in GDP.
German business morale measured by the Ifo index is due at 0900 GMT and is expected to fall for the seventh successive month to the lowest in almost three years in November. Business expectations, however, are seen steady, pointing to a recovery next year.
Data this week showed service providers' expectations were the most downbeat since March 2009 as firms became more worried that clients would slash their budgets next year and that the euro zone crisis would hamper a German recovery.
(Additional reporting by Alexandra Hudson and Stephen Brown; Editing by Stephen Brown and Patrick Graham)
Most Popular Slideshows
- Kristen Stewart Moving On With Nicholas Hoult, Jennifer Lawrence Dating Chris Martin – Reports [PHOTOS]
- Kate Middleton Suffocated in Kensington Palace, Queen Elizabeth Reported War With The Duchess [PHOTOS]
- Chris Martin Dating Reports: Jennifer Lawrence Vs Gwyneth Paltrow [PHOTOS]
- 9/11 Dust Cloud Most Likely Have Created Pregnancy Issues: Celebrities Who Posed Nude During Pregnancy
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Saudi Arabia: Brothers Beheaded For Smuggling Marijuana Into The Kingdom
- ISIS: More Journalists Beheading To Come After James Foley and Steven Sotloff [Video]
- 4.7-Inch, 5.5-Inch iPhone 6 Models Confirmed with Similar Build, Cam Features & 300+ Screen Pixels on Release Date
- Moto X+1 is Likely Nexus 6 Template; Motorola Shamu is 1st Android Silver with Snapdragon 810 – Reports
- James Foley’s Executioner Has British Accent—A Chilling Reminder That ISIS Has Foreign Members
- ISIS Posts Graphic Beheading Video of US Journalist James Foley
- iPhone 6 Release Date Remains On Course for Sept-Oct 2014 as Apple Delays iWatch Debut to 2015