German economy barely escapes the recession


Contrary to expectations, the German economy grew slightly in the summer. In the third quarter of 2019, gross domestic product increased by 0.1 percent compared to the previous quarter, as the Federal Statistical Office announced on Thursday in Wiesbaden.

In the second quarter, however, according to revised figures, there had been a decline of 0.2 percent, after Europe's largest economy at the beginning of the new year according to new calculations, a growth of 0.5 percent could be booked.

With the surprising return to growth, a "technical recession" was avoided. Economists talk about such a development when economic output shrinks for two quarters in a row.

A crash of the German economy after years of recovery, most economists do not expect anyway. "The upswing is over, but so far is not to be expected from a broad and deep recession," write the five "business practices" as a top adviser to the Federal Government in their recently published autumn report.

2020 will be weaker

However, the Federal Government and leading economic research institutes expect significantly less economic growth for the full year 2019 than last year. The latest forecasts assume 0.5 percent. In 2018, German economic output had risen by 1.5 percent.

International trade conflicts and the drama surrounding Brexit put pressure on export-oriented German industry. The uncertainty slows down investment. Key industries such as automotive and mechanical engineering as well as the electrical and chemical industries have long felt this.

The exports surprised in September: In the month 4.6 percent more goods "Made in Germany" were sold abroad than a year before. For the year as a whole exports amount to 997.1 billion euros, up just under one percent.

Private consumption has so far been a stable pillar of the economy, as it did in the summer quarter. One reason for this is the low unemployment rate. However, the weakening economy is increasingly dampening consumer sentiment as well: market researchers at Nuremberg's GfK in their monthly consumer climate study for November reported the lowest level since autumn 2016.

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