German Economy Rebounds Strongly In Q3
30 October 2020 - 5:05PM
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The German economy rebounded strongly in the third quarter from
the historic slump caused by the coronavirus pandemic, and the pace
of growth exceeded expectations, preliminary data from Destatis
showed Friday.
Gross domestic product grew 8.2 percent quarter-on-quarter,
reversing a 9.8 percent fall in the second quarter. This was also
faster than the expected growth of 7.3 percent.
Underpinned by consumer spending, investment in equipment and a
sharp rise in exports, the economy ended the severe recession that
was caused by the impact of the coronavirus, or Covid-19, pandemic
and subsequent lockdown restrictions.
However, Destatis said GDP was 4.2 percent lower compared to the
fourth quarter of 2019, the quarter before the global corona
crisis.
Year-on-year, the price-adjusted GDP fell 4.1 percent in the
third quarter, much slower than the 11.3 percent decrease seen in
the second quarter and a 5.2 percent fall economists' had
forecast.
Likewise, GDP, adjusted for calendar effects, declined 4.3
percent annually after easing 11.3 percent.
The statistical office is set to publish detailed results for
the third quarter on November 24.
The International Monetary Fund forecast Germany's GDP to
contract 6 percent this year, but to recover next year with a 4.2
percent growth.
In the monthly report released Monday, Bundesbank said the
economic recovery is likely to continue in the current quarter,
albeit at a much slower pace.
The 'lockdown 2.0' still tries to spare industry but given that
many parts of the service sector will now be closed for at least
four weeks, there is a risk that despite new government support of
some EUR 10 billion, unemployment and insolvencies will increase,
Carsten Brzeski, an ING economist said.
Add to this second or third round effects and probably more
lockdowns in other European countries and a double-dip looks
unavoidable, the economist noted.
The government forecast the economy to shrink 5.5 percent this
year, before expanding 4.4 percent in 2021. For the year 2022, an
increase in economic output of 2.5 percent is expected.
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