Germany: Economic activity gains steam in Q3
November 24, 2011
Despite the economic headwinds caused by the ongoing Eurozone debt crisis, economic growth remained resilient. In the third quarter, GDP expanded a seasonally and working-day adjusted 0.5% over the previous quarter, which represented an acceleration over the revised 0.3% increase recorded in the April-June period (initially reported: +0.1% quarter-on-quarter) and was in line with market expectations. Compared to the same period last year, the economy grew 2.5%, which was down from the previous quarter's 3.0% expansion. The acceleration reflected stronger domestic demand. Total consumption swung from a 0.3% contraction in the second quarter to a 0.8% expansion in the third quarter, buttressed by resilient private consumption (Q2: -0.6% qoq; Q3: +0.8% qoq). Public spending grew 0.6% in the third quarter, following an expansion of the same magnitude in the second quarter. In addition, gross fixed investment accelerated from a 0.4% increase in the second quarter to a 0.9% expansion in the third. Exports of goods and services expanded 2.5% over the previous quarter (Q2:+2.8% qoq) while imports grew 2.6% (Q2: +2.9% qoq). The external sector's net contribution remained at the 0.1 percentage points recorded in the second quarter.
Author: Ricardo Aceves, Senior Economist