Germany’s GDP shrinks 0.1% in third quarter

Germany’s economy shrank marginally by 0.1% in the third quarter of the year compared to Q2, the Federal Statistical Office said on Friday.

The figure confirmed a preliminary GDP estimate released in late October. It also reversed a 0.1% growth registered in Q2.

Private consumer spending dropped 0.3% quarter-on-quarter in Q3, following a 0.2% growth in Q2, mostly due to the impact of rising interest rates and persistently high inflation.

Conversely, fixed investment grew 0.6% quarter-on-quarter in Q3, following a 0.3% drop in Q2, driven by rising investment in both equipment and construction.

Public spending also expanded, by 0.2% quarter-on-quarter in Q3, while snapping a string of four quarters of contraction.

In annual terms, Germany’s economy shrank at a final rate of 0.4% in Q3, after a 0.1% growth in the prior three-month period.

“After the weak economic development seen in the first half of 2023, the German economy began the second half of the year with a slight drop in performance,” Ruth Brand, president of the statistics office, was quoted as saying by Reuters.

The Euro was slightly firmer against the US Dollar in thin Black Friday trade, with the EUR/USD currency pair last trading at 1.0910. The major Forex pair held not far from the 3 1/2-month high of 1.0965 it registered on Tuesday.