Trade conflicts, a weakening world economy and the Brexit dispute: The German economy is feeling the effects of the difficult economic environment – the result for the third quarter are nevertheless surprisingly positive.
Contrary to almost all expectations, the German economy grew ever so slightly in the third quarter – and thus barely escaped an impending recession. According to the Federal Statistical Office in Wiesbaden, gross domestic product (GDP) rose by 0.1 percent between July and September compared with the previous quarter. If it had fallen again as in the second quarter, the definition of a so-called technical recession would have been fulfilled.
The statisticians also corrected their figures for the second quarter – from minus 0.1 percent to minus 0.2 percent. On the other hand, GDP grew more strongly in the first quarter than initially reported, namely by 0.5 percent instead of 0.4 percent.
Experts: “Upturn is over”
Most economists do not expect the German economy to crash after years of growth. “The upturn has come to an end, but a broad and deep recession cannot yet be expected,” writes the German Council of Economic Experts in its latest autumn report.
However, the German government and leading economic research institutes expect significantly less economic growth for 2019 as a whole than in the previous year. The latest forecasts assume 0.5 percent. In 2018, German economic output had still increased by 1.5 percent.
Consumer confidence low
International trade disputes and the dispute over Brexit are weighing heavily on the export-oriented German industry; uncertainty is slowing investment. Key sectors such as automotive and mechanical engineering, as well as the electrical and chemical industries, have long felt the effects.
Export numbers, however, were surprisingly positive in September: an additional 4.6 percent of goods “Made in Germany” were sold abroad compared to the previous year. Over the year as a whole, exports are still up by almost one percent to 997.1 billion euros.
Private consumption has been a stable pillar of the German economy to date, although the weakening economy is increasingly dampening consumer confidence. In their monthly consumer confidence study for November, the market researchers at the Nuremberg-based GfK calculated the lowest value since autumn 2016.