Germany: Economy weakens somewhat in third quarter
November 23, 2012
In the third quarter, GDP expanded a seasonally adjusted 0.2% over the previous period, which confirmed the flash estimate released on 15 November. The reading came in below the 0.3% expansion observed in the second quarter, but was in line with market expectations. Compared to the same period last year, the economy grew 0.4% in Q3, a notch down from the 0.5% growth rate tallied in Q2. The quarterly deceleration was entirely driven by a weakening in the external sector. Exports of goods and services expanded 1.4% in the third quarter, slower than the 3.3% expansion recorded in Q2. Meanwhile, imports decelerated from a 2.2% increase in the second quarter to a 1.0% expansion in the third. Consequently, the external sector's net contribution to overall economic growth fell from 0.7 percentage points in Q2 to 0.3 percentage points in Q3. On the other hand, domestic demand improved in the third quarter, buttressed by a 0.3% increase in private consumption (Q2: +0.1% quarter-on-quarter) and a 0.4% expansion in government spending (Q2: -0.2% qoq). Gross fixed investment bounced back in Q3, expanding 0.2% over the previous quarter, which contrasted the 2.1% decline recorded in the second quarter.
Author: Ricardo Aceves, Senior Economist