BREAKING NEWS

Exports, spending help Germany avoid recession in third quarter

Exports, spending help Germany avoid recession in third quarter
FILE PHOTO: Containers are seen at a terminal in the port of Hamburg, Germany November 14, 2019. REUTERS/Fabian Bimmer -
Copyright
FABIAN BIMMER(Reuters)
Euronews logo
Text size Aa Aa

BERLIN (Reuters) – Strong exports, state spending and consumers helped the German economy avoid a recession in the third quarter, detailed data showed on Friday, confirming a preliminary reading of a 0.1% expansion on the quarter.

The Federal Statistics Office said exports grew 1% in the quarter, which meant that net trade contributed 0.5 percentage points to overall economic expansion.

Europe’s biggest economy is going through a soft patch as its export-oriented manufacturers languish in a recession linked to trade frictions, a struggling car industry and uncertainties over Britain’s planned departure from the European Union.

Conservative Chancellor Angela Merkel’s right-left coalition government has rejected calls from industry groups and economists for a stimulus package to put the economy firmly back on a growth trajectory.

In its 10th successive year of growth, the economy has been relying on strong consumption as exports weaken, which resulted in a second quarter GDP contraction of 0.2%.

“Particularly the strength of private consumption remains an important anti-recession insurance for the economy,” Carsten Brzeski of ING wrote in a note. “Private consumption has been growing consecutively every quarter since the start of 2014.”

The data showed that private consumption grew 0.4% and state spending by 0.8%, which translated into each segment contributing 0.2 percentage points to growth.

Acting on a programme agreed between Merkel’s conservatives and their Social Democrat coalition partners after an election two years ago, the government has increased allowances for families, students and pensioners. This comes in addition to tax cuts and more spending on infrastructure.

(Reporting by Joseph Nasr and Rene Wagner; Editing by Michelle Martin and Alex Richardson)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.
Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.