November 25, 2021
Berlin (Reuters)-Germany’s household spending was the only driver of a weaker-than-expected third-quarter expansion, more than offsetting lower corporate investment and state spending over the summer months. Detailed data was shown on Thursday.
According to the Federal Bureau of Statistics, gross domestic product in Europe’s largest economy increased 1.7% quarter-on-quarter under adjusted conditions. This did not reach the momentary estimate of 1.8% released last month.
The data show that Germany’s growth slowed from the upwardly revised 2% expansion from April to June. The economy shrank 1.9% in the first three months of the year.
Overall growth in the third quarter increased by 3 points, with consumer spending in July-September up 6.2% from the last three months.
“This is due to the catch-up effect of the services sector, especially the restaurant, bar and hotel industries,” said Thomas Gitzel, vice president of the Banking Group.
However, Gitzel added that sustainable supply bottlenecks in manufacturing are holding back overall growth. This is seen in the weakness of corporate investment in machinery and buildings in the third quarter.
State spending also fell in the quarter, pushing the GDP headline numbers even further.
The surge in new coronavirus infections over the past few weeks could kick off the last remaining pillar of growth in Germany in the final quarter.
“The pandemic results are causing a sort of stop-and-go growth,” Gitzel said.
Separately, a GfK Institute study found that a surge in coronavirus infections and unusually high inflation are squeezing German consumer morale, weakening the business outlook for the upcoming Christmas shopping season.
(Report by Michael Nienaber, edited by Maria Sheahan and Catherine Evans)
Germany’s household spending drives weaker than expected third-quarter growth
Source link Germany’s household spending drives weaker than expected third-quarter growth