Germany: Second reading confirms GDP contracted in Q3
A second reading confirmed that GDP declined 0.1% on a seasonally adjusted quarter-on-quarter basis in the third quarter, below the 0.1% expansion tallied in the second quarter. Q3’s reading marked the worst result since Q4 2022. On an annual basis, economic activity declined 0.8% in Q3, following the previous quarter’s 0.4% decrease, marking the sharpest downturn since Q1 2021.
Household spending fell 0.3% in the third quarter, which contrasted the second quarter’s 0.2% expansion. Government spending rebounded, growing 0.2% in Q3 (Q2: -0.4% s.a. qoq). Meanwhile, fixed investment bounced back, growing 0.6% in Q3, contrasting the 0.3% decrease in the previous quarter. On the external front, exports of goods and services slid at a more moderate pace of 0.8% in Q3 (Q2: -0.9% s.a. qoq). Conversely, imports of goods and services deteriorated, contracting 1.3% in Q3 (Q2: +0.1% s.a. qoq).
Our panelists expect GDP to contract slightly quarter on quarter in Q4, bringing the economy into a technical recession. Activity continues to be weighed upon by high energy prices, weak external demand and recent rises in interest rates.