German economy grew more than expected in Q3, underpinned by state spending
Preliminary German GDP figures show modest quarterly growth alongside slower export momentum and continuing reliance on public spending, according to economists.
TL;DR
- Germany’s economy grew 0.2% in Q3 compared with the previous quarter, according to preliminary official data.
- The statistics office reported slightly higher consumption and slower export growth.
- Economists cited by Reuters questioned whether the recovery could be sustained without stronger investment.
Preliminary figures showed Germany’s gross domestic product increased 0.2% in Q3 from the previous quarter, Reuters reported. The Associated Press also reported the increase while noting pressures from higher energy prices. [1] [2]
Reuters reported price-adjusted growth of 1.3% compared with the same quarter a year earlier. The statistics office also recorded growth of 0.3% in Q2 and 0.4% in Q1. [1]
According to Reuters, the statistics office said household and government consumption increased slightly while the earlier rapid growth in exports slowed. Economists cited by Reuters pointed to public spending on infrastructure and defence as a driver of the recovery. [1]
Bethmann HAL economist Alexander Krueger argued that the economy would probably have stagnated without the public spending impulse, Reuters reported. LBBW economist Jens-Oliver Niklasch said substantially stronger investment would be needed for sustained, higher growth. [1]
Why it matters
The preliminary data show how Germany’s economy performed during an energy shock, while economists’ assessments leave the durability of the recovery open.
Editor's note
GDP figures are preliminary and both news organizations rely on the same official statistics. The assessments of public spending and future growth are attributed to economists.