Consumer epending helps Germany skirt recession in Q3

[FRANKFURT] Higher household and government spending enabled Germany, Europe's biggest economy, to avoid a recession in the third quarter, official data showed on Tuesday.

Increased exports also provided a boost, while falling investment acted as a drag on recovery, the federal statistics office Destatis said in a statement.

Confirming a preliminary estimate released earlier this month, the statisticians calculated that gross domestic product (GDP) expanded by 0.1 per cent in the period from July to September.

In the preceding three months, the economy had shrunk by 0.1 per cent.

Recession is technically defined as two consecutive quarters of falling GDP.

Providing a detailed breakdown of the different GDP components, Destatis wrote that "in the third quarter, positive impulses came primarily from private consumer spending, which increased by 0.7 per cent.

Government spending was also higher, rising by 0.6 per cent."

In addition, exports were 1.9 per cent higher than in the second quarter, climbing faster than imports, so that net foreign trade "made a slightly positive contribution to growth," Destatis said.

By contrast, investment declined, primarily in machinery and equipment, but also in construction, the statement said.

AFP