that of Germany economy expanded unexpectedly in the third quarter supported by private consumption, flash data from Destatis showed on Friday.
The euro zone’s biggest economy posted quarterly growth of 0.3%, confounding expectations for a 0.2% contraction. The pace of growth was faster than the 0.1 percent increase recorded in the second quarter.
Destatis said the economy managed to hold up despite challenging conditions in the global economy, with the ongoing Covid-19 pandemic, supply chain disruptions, rising prices and the war in Ukraine .
Gross domestic product, on an unadjusted basis, rose 1.1 percent annually, slower than growth of 1.7 percent in the previous quarter and economists’ forecast of 0.7 percent.
Calendar-adjusted GDP growth slowed to 1.2% from 1.6%.
The statistics office warned that due to the ongoing Covid-19 crisis and the impact of the war in Ukraine, these results are subject to greater uncertainties than usual.
Destatis will release detailed GDP data on November 25.
The Bundesbank said the German economy is probably on the brink of recession. In October’s monthly report, the bank said economic output could fall significantly overall in the fourth quarter of this year and the first quarter of 2023.
A week ago, Fitch Ratings maintained Germany’s coveted AAA ratings, citing a diversified, high-value-added economy with strong institutions and strong public finances.
But the rating agency lowered Germany’s GDP growth forecast for this year and next to 1.4% and -0.5%, respectively.
Fitch forecast an economic contraction in winter 2022/2023 due to the severe energy shock caused by the war in Ukraine, while growth is further weakened by slower growth in China, which is China’s second largest market export from Germany.
Data released earlier Friday showed France and Spain posted slower economic growth in the third quarter due to weak foreign demand. French GDP grew by just 0.2% from the second quarter, when the economy expanded by 0.5%.
Spain’s quarterly economic growth also eased to 0.2 percent, down sharply from 1.5 percent in the second quarter.
In the latest World Economic Outlook report, published on October 11, the International Monetary Fund said that Germany and Italy are expected to record economic contractions next year.
The Washington-based lender predicted the euro zone would see the steepest slowdown as the energy crisis caused by the Ukraine war continues to take a heavy toll, slowing growth to 0.5 percent in 2023.
Eurostat publishes the GDP of the euro area for the third quarter on 31 October.
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