German economy grows slower than expected in third quarter

The Federal Statistical Office, or Destatis, reported on Friday that the German economy grew less than analysts expected in the third quarter of 2024.

Gross domestic product grew by only 0.1% compared to the second quarter, less than the preliminary estimate of 0.2%.

This year, Germany has only narrowly avoided a recession, defined by two consecutive quarters of shrinkage.

Household consumption rose by a modest 0.3% compared to the previous quarter, and government spending rose by about 0.4%.

Exports of goods, a key factor in Germany's economy, fell by about 2.4%.

Inflation, industrial downturn contributing factors

The German economy has faced a decline in industrial orders due to the COVID-19 pandemic and the impact of Russia's war in Ukraine.

Despite sinking inflation, the country has been struggling to turn its beleaguered economy around. One of the most striking examples of the economic malaise has been the crisis at Volkswagen, a company once synonymous with German prosperity, which is trying to slash billions from its budget and close several factories across the country.

Indeed, the economy is mostly to blame for the collapse of the coalition government of Chancellor Olaf Scholz earlier this month.

Economists are hoping that a continued downward trend for inflation and slight increases in average wages will drive consumer spending in the last quarter of the year.

es/lo (dpa, Reuters)