Germany avoids recession, defying predictions

Germany Gross Domestic Product, Pic: Statistisches Bundesamt (Destatis) 2019

Germany´s economy has avoided recession, and instead returned to growth last quarter by 0.1 per cent, defying economists´ predictions.

That is the percentage by which it expanded its GDP from July to September, data out today showed. This means that Europe´s largest economy narrowly avoided another contraction.

On an annual basis, gross domestic product expanded 0.5 per cent from July through September after a 0.3 per cent expansion in the previous three months, seasonally adjusted figures from the Federal Statistics Office showed.

Household spending helped overcome the weakness in German factories, according to Economy Minister Peter Altmaier, along with state spending and construction.

Analysts say German manufacturers, whose exports have undergirded the country’s economic strength for decades, are struggling with weaker foreign demand, tariff disputes sparked by US President Trump’s ‘America First’ policies and business uncertainty linked to Brexit.

The car industry, an important contributor to overall growth, is also struggling to adjust to stricter regulation following the emission cheating scandal and with managing the move away from combustion engines toward electric cars.

The news is welcome for Europe’s economy which is battling a global slowdown caused by a Chinese slowdown, the global trade dispute and Brexit mayhem.

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Shirin Aguiar