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Germany’s economy grew faster than expected in the third quarter as household and government consumption provided support, according to preliminary figures published by the Federal Statistical Office on October 30. Gross domestic product rose 0.2 percent compared with the previous quarter after adjustments for prices, seasonality and calendar effects, exceeding the 0.1 percent forecast by analysts polled by Reuters. The expansion marked the fourth straight quarter of growth following increases of 0.4 percent in the first quarter and 0.3 percent in the second. The statistics office noted that the very dynamic export trend from the first half of the year slowed noticeably.
The Federal Statistical Office reported that the economy expanded 1.3 percent from a year earlier on a price-adjusted basis and 1.2 percent when also adjusted for calendar effects. This performance comes as the country navigates challenges including elevated energy prices linked to international tensions and record low water levels on the Rhine that have disrupted inland shipping. A Destatis assessment found that capital formation declined in the quarter even as consumption edged higher.
Public spending on infrastructure and defence has been a key driver behind the recovery. Without this fiscal impulse, economic output would probably have stagnated, according to Alexander Krueger, chief economist at Bethmann HAL bank. The data underscore the reliance on government measures to sustain momentum while private sector activity remains muted, a Reuters report indicated.
In the wider euro area, GDP rose 0.4 percent in the third quarter, Eurostat reported the same day, down from 0.6 percent in the prior period. Germany’s result aligned with moderate growth seen in several other member states including Belgium and Czechia. France, by contrast, saw its economy contract by 0.1 percent over the quarter.
ING economist Carsten Brzeski described the latest figures as placing the German economy on track for its best annual performance since 2022. “The German economy is on track for its best growth performance since 2022,” Brzeski said. “Some would say there’s life in the old dog yet.” He cautioned however that the rebound may not translate into a sustainable recovery given unresolved structural problems in German industry.
A note from Commerzbank economic research stated that the economy should continue to grow in coming quarters at a moderate pace although the lack of far-reaching reforms is likely to prevent a meaningful pickup in corporate investment. The Federal Statistical Office will publish more detailed results for the third quarter on November 25. Previous quarterly figures underwent only minor revisions in the latest release.
