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Germany: German economy slows slightly in Q3 on weaker external sector

November 24, 2015

The German economy decelerated slightly in Q3 as a poorer performance of the external sector more than offset healthy consumption dynamics. GDP rose a seasonally-adjusted 0.3% in Q3 over the previous quarter, according to more complete data published by the Federal Statistics Office (Destatis) on 24 November. The expansion followed Q2’s slightly faster 0.4% increase and matched the preliminary estimate as well as met market expectations. Compared to the same quarter of the previous year, GDP increased 1.8% in Q3, which came in above the 1.6% expansion registered in Q2.

Private consumption accelerated from Q2’s 0.1% rise to a 0.6% expansion in Q3 and public spending picked up notably from a 0.7% increase in Q2 to 1.3% growth, marking the largest gain in over six years. Gross fixed investment improved slightly, advancing from a 0.4% contraction in the second quarter to a softer 0.3% drop.

On the external front, exports of goods and services slowed significantly, increasing a modest 0.2% in Q3 (Q2: +1.8% quarter-on-quarter), which was the smallest expansion in almost four years. At the same time, imports’ growth accelerated from 0.5% in Q2 to 1.1% in Q3. Consequently, the external sector’s net contribution to overall economic growth deteriorated notably from Q2’s plus 0.7 percentage points to minus 0.4 percentage points in Q3, which was the weakest result in two years.

The government expects economic activity to increase 1.7% in 2015 and 1.8% in 2016. FocusEconomics Consensus Forecast panelists expect economic activity to expand 1.7% in 2015, which is unchanged from last month’s forecast. For 2016, the panel forecasts GDP growth of 1.8%, which is also unchanged from last month’s forecast.


Author: Teresa Kersting, Economist

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Germany GDP Q3 2015 0

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Federal Statistics Office (Destatis) and FocusEconomics Consensus Forecast


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