Economic growth in European powerhouse Germany slowed slightly in the third quarter, preliminary data showed yesterday, as it braved headwinds from China’s economy and the Volkswagen pollution scandal.
Europe’s largest economy expanded by 0.3 percent in the July-September period on a quarterly basis, the federal statistics office said.
That compared with quarterly growth of 0.4 percent in the previous quarter.
The statistical office said the third-quarter growth was mainly due to “domestic final consumption expenditure” with both household and government consumption spending rising.
The 0.3 percent growth rate for last quarter matched the median estimate of analysts surveyed by Bloomberg News.
The economy expanded by a seasonally adjusted 1.7 percent from a year earlier.
The German government last month trimmed its economic growth forecast for this year to 1.7 percent from the previous forecast of 1.8 percent, citing weakness in China and other major emerging economies. It left its forecast for next year unchanged at 1.8 percent.
Clouds have been gathering over the German economy with factory orders, a key measure of demand, falling for the third month in a row in September, according to data unveiled earlier this month.
Industrial production also slid in September, weighed down by slowing activity in the manufacturing and construction industries.
“Forward-looking indicators still suggest surprising confidence in future growth,” London-based Societe Generale SA economist Anatoli Annenkov said.
“This could be linked to the robust labor market, rising wage growth with still-low inflation and increased demand arising from the migrant inflows since the summer,” he said.
French GDP also expanded 0.3 percent last quarter, matching estimates, separate data released earlier showed.
The initial estimate of 0.3 percent quarter-on-quarter growth in GDP in July to September followed no expansion in the second quarter, which had raised concerns about the nation’s weak economic recovery.
French Minister of Finance Michel Sapin said that the latest figures by INSEE mean that France’s economy is to grow “by at least 1.1 percent” for the year as a whole, adding he believed the country had “exited the period of extremely weak growth that had lasted too long.”
He said the French economy had entered a “new phase” that would likely mean faster growth next year.
The government’s official forecast for next year is for the economy to expand by 1.5 percent, still a level too low to bring down the high level of unemployment in which one person in 10 has no job.
Additional reporting by Bloomberg
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