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GDP: German economy is growing by 8.5 percent faster than expected

2020-11-24T19:31:24.481Z


Economic performance in Germany developed better than expected after the Corona kink. GDP rose by 8.5 percent in the third quarter. However, another setback threatens.


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V instead of U: Also thanks to a temporary VAT reduction?

Photo: Christian Charisius / DPA

The German economy developed better in the summer quarter than previously assumed.

The gross domestic product grew after the Corona slump in spring from July to September by 8.5 percent compared to the previous quarter, as the Federal Statistical Office announced.

With the strong growth in the third quarter, the German economy has made up for a large part of the massive decline in gross domestic product from the spring, it is said.

The collapse of the German economy is like a V instead of a U.

A flash estimate from the end of October had shown an increase of 8.2 percent.

In the spring, the German economy slumped by 9.8 percent as many shops had to remain closed due to the pandemic and supply chains were disrupted.

In the current final quarter, there is a threat of a new setback due to the second corona wave, as the partial lockdown imposed therefore affects the hospitality and tourism industries, for example.

Experts fear that the economy could now contract again.

For the final quarter of 2020, the Bundesbank had last forecast that the German economy could "stagnate or even decline" in the final quarter.

The Council of Economic Experts had expected an overall slump of 5.1 percent in 2020, a little less than the federal government itself. According to economic wise men, growth of 3.7 percent could follow in the coming year.

One percent expected in the fourth quarter

According to the Federal Statistical Office, growth in the third quarter is due in particular to higher private consumer spending (plus 10.8 percent) and a sharp rise in exports of goods and services (plus 18.1 percent).

The state had tried to stimulate private consumption, among other things, with a temporary reduction in value added tax, and in foreign trade the German economy was again able to benefit particularly from the rapid recovery in the important sales market of China.

According to the Federal Statistical Office, companies are now investing more in machines and other equipment.

On the other hand, there was no growth impetus from construction investments, they fell by 2.0 percent compared to the previous quarter.

In a year-on-year comparison, however, the corona crisis left deep marks.

Compared to the third quarter of 2019, economic output in Europe's largest economy contracted by 3.9 percent after adjustment for prices.

The now expected second slump is likely to be "very mild" compared to the economic crash in March and April, as Holger Schmieding, chief economist at Berenberg Bank said.

"First estimates indicate a decline of around one percent," said Claus Michelsen, economic director of the DIW Institute.

»The federal government's aid packages should, however, significantly reduce the negative consequences.

The successes in developing an effective vaccine also give hope that the restrictions will not become permanent and that the recovery will continue in the spring. "

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apr / Reuters / dpa

Source: spiegel

All business articles on 2020-11-24

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