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German GDP up, but not consumer spending


German GDP up, but not consumer spending


German GDP is up in the third quarter of the year, thanks mainly to a build-up in inventories and a rise in investment. It is up by 0.7 per cent. Europe’s largest economy has fought its way out of its sharpest recession since World War Two.

Despite the good news, weakness in private consumption actually deducted points from the overall figure. Poor consumer spending is partly being blamed on the end of government’s car-scrapping subsidy. Earlier, the Ifo business climate index for November showed a rise to the highest level since August 2008 – showing that German business confidence is growing. The 93.9 figure was higher than analysts had expected. But the strength of the euro against the dollar is having a negative impact on German exports – one of the driving factors for economic recovery. And the Finance Ministry has said GDP growth is likely to slow in the final quarter of the year.

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