German Q3 slowdown expected after strong start of year: finance ministry

[BERLIN] A slowdown in the German economy during the third quarter was expected after strong growth in the first six months of the year, the finance ministry said on Monday, adding that private consumption and state spending were the main drivers.

The German economy grew by 0.2 per cent for the quarter after it expanded 0.4 per cent in the three months to June as exports weakened.

The ministry said in its monthly report that the labour market remained solid and job creation was positive in the autumn. "Job creation was maintained albeit at a somewhat weaker pace than in the first two quarters," the ministry said. "Unemployment fell further."

The government last month raised its 2016 growth forecast to 1.8 per cent from 1.7 per cent previously, which would be the strongest expansion rate in half a decade.

Leading economic institutes are even predicting a growth rate of 1.9 per cent this year.

REUTERS