Germany’s economy contracts in Q3 for first time in over 3 years
Germany, Europe’s largest economy, contracted for the first time in more than three years, shrinking by 0.2 per cent between the second and third quarter on the back of a fall in exports.
Growth in the eurozone’s economic powerhouse was expected to be weak on the back of delays in German automakers meeting the new emissions standards. The region’s economy is also being hit by weaker exports to China. The contraction was slightly sharper than expected and is the first since early 2015.
“The slight quarter-on-quarter decline in the gross domestic product was mainly due to the development of foreign trade. According to provisional calculations, exports were down while imports were up in the third quarter of 2018 compared with the second quarter of the year,” De Statis, the federal statistics office, said.
“As regards domestic demand, there were mixed signals. While gross fixed capital formation both in machinery and equipment and in construction was higher than in the previous quarter, final consumption expenditure of households declined. Government final consumption expenditure was slightly higher than in the previous quarter.”
The publication of the figure by De Statis follows disappointing figures for regional growth. The eurozone’s economy expanded by just 0.2 per cent in the second quarter — the smallest expansion in more than four years. Italy’s economy did not grow at all.