German Q3 GDP Contraction Confirmed
The German economy shrank a seasonally-adjusted 0.2 percent on quarter in the three months to September of 2018, unrevised from the preliminary estimate and after a 0.5 percent growth in the previous period. This was the first quarterly contraction since the first quarter of 2015 due to declines in both exports and household consumption.
The largest negative contributions to the GDP growth came from foreign trade (-1 percentage points) and household consumption (-0.1 percentage points). Meanwhile, government spending was neutral while gross fixed capital formation added 0.2 percentage points to the GDP and changes in inventories contributed 0.7 percentage points.
Exports of goods and services declined by 0.9 percent in the third quarter, compared to a 0.8 percent growth in the second quarter. At the same time, imports grew 1.3 percent, following a 1.5 percent rise in the previous period.
Household consumption dropped 0.3 percent (vs 0.3 percent in Q2) amid reluctance to buy new cars while government spending rose 0.2 percent (vs 0.8 percent in Q2). Meanwhile, fixed investment expanded at a faster pace (0.8 percent vs 0.5 percent in Q2), driven by investment in machinery and equipment (0.8 percent vs 0.1 percent), construction (0.9 percent, the same as in Q2) and other fixed assets (0.2 percent vs 0.3 percent).
Year-on-year, the economy expanded a calendar-adjusted 1.1 percent in the third quarter, following a 2 percent growth in the previous three-month period. On an unadjusted basis, the GDP grew by 1.1 percent, much weaker than a 2.3 percent advance in the June quarter.
11/23/2018 4:05:52 PM