BERLIN: The preliminary estimate of Germany’s GDP growth for the third quarter had come in at 0.19 percent in sequential terms, which was weaker than expected and lower than the second quarter’s 0.4 percent growth. This was despite a return to positive growth in both retail sales and industrial production. Even if domestic demand was the main growth driver, net exports are expected to have come in negative.
Germany’s private consumption is expected to have grown just mildly by 0.3 percent sequentially in the third quarter, with government consumption staying slightly stronger at 0.4 percent, noted Societe Generale in a research report. Total investment is likely to have come in quite weak at 0.2 percent, but business investment is expected to have dropped again by 0.2 percent.
Both imports and exports are expected to have been widely stable with a slight decline in exports when compared with the second quarter. It is expected to have dropped 0.2 percent. The subdued economic growth in the third quarter might have been influenced by certain volatility in the summer, possibly Brexit related, while the fourth quarter is likely to come in quite stronger as business confidence has rebounded significantly, said Societe Generale.
Germany’s domestic conditions are expected to have stayed firm with a growing labor market. This strength is likely to continue in 2017 with the next federal election approaching, added Societe Generale.
