GDP in Germany
Germany - GDP (billions of Euros)
Economy contracts in Q2 as external sector falters
A detailed breakdown of national accounts data saw no revisions to preliminary growth figures. As such, the economy contracted 0.1% on a seasonally- and calendar-adjusted quarter-on-quarter basis in Q2, contrasting the 0.4% expansion logged in the first quarter. Meanwhile, on an annual basis, the economy flatlined in Q2 (Q1: +0.8% year-on-year)—marking the first time output has not grown since Q1 2013.
A downturn on the external front drove the overall contraction, as the drop in exports outweighed that of imports in the second quarter. In quarter-on-quarter terms, exports of goods and services shrank 1.3% in Q2, contrasting a strong 1.8% increase in Q1. Imports of goods and services, meanwhile, fell a relatively modest 0.3% on a quarterly basis in Q2 (Q1: +0.9% quarter-on-quarter). As a result, trade subtracted 0.5 percentage points from economic growth in the second quarter, swinging from a 0.5 percentage point contribution in the prior period.
Domestically, dynamics were more upbeat but remained lackluster nonetheless. Private consumption growth stumbled forwards (Q2: +0.1% qoq; Q1: +0.8 qoq), amid deteriorating consumer sentiment and an uptick in the unemployment rate. Furthermore, fixed investment contracted 0.1% quarter-on-quarter in Q2 following the robust 1.6% quarter-on-quarter expansion in Q1, due to a considerable downturn in investment activity in the construction sector. That said, government consumption rose 0.5% qoq in Q2 (Q1: +0.8% qoq), which, coupled with a positive contribution from inventories, supported overall domestic demand growth in the second quarter.
Looking ahead, most eyes are on the international scene: Ongoing trade conflicts, a disorderly Brexit and an economic slowdown in the Eurozone all threaten to derail the German economic engine further. On top of that, while the second-quarter result suggests that domestic economy continued to perform relatively well, the headwinds at home. As summarized by Carsten Brzeski, chief economist at ING Germany:
“On the back of weak confidence indicators, the risk of another contraction of the economy in the third quarter and hence a technical recession has recently increased, not decreased. The resilience of the domestic economy against the industrial slowdown and external woes has only started to weaken since the summer. […] a further escalation of the trade conflict and global uncertainty combined with no fiscal stimulus at all, is currently probably the worst of all nightmares for the German economy.”
FocusEconomics Consensus Forecast panelists see the economy expanding 0.7% in 2019, which is unchanged from last month’s forecast. For 2020, the panel forecasts GDP growth of 1.1%.
Germany - GDP (EUR bn) Data
|GDP (EUR bn)||2,831||2,943||3,046||3,154||3,281|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||-0.68||0.41 %||Sep 04|
|Exchange Rate||1.10||0.65 %||Sep 04|
|Stock Market||12,025||-0.41 %||Sep 04|
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October 11, 2019
Harmonized German consumer prices fell 0.1% month-on-month in September, matching the result of the prior month.
October 10, 2019
Exports fell 1.8% month-on-month on a calendar- and seasonally-adjusted basis, contrasting the revised 0.8% rise in the prior month (previously reported: +0.7% month-on-month).
October 8, 2019
Industrial production rose 0.3% month-on-month on a seasonally- and calendar-adjusted basis in August, swinging from a revised 0.4% drop in July (previously reported: -0.6% month-on-month).
September 27, 2019
Sentiment among German consumers is expected to increase from 9.7 in September to 9.9 in October, according to the GfK German Consumer Climate Study.
September 24, 2019
German business sentiment inched up to 94.6 in September from 94.3 in the prior month, largely thanks to an improvement outlook on the current situation as the views on business expectations worsened.