German economy stagnates in third quarter

(Sharecast News) - The German economy continued to stagnate in the third quarter, official data showed on Tuesday, in line with expectations. According to the second estimate from Destatis, the country's Federal Statistical Office, GDP was 0.0% in the three months to September end compared to the previous quarter. However, it was a modest improvement on the previous print, when GDP fell 0.2%.

Ruth Brand, Destatis president, said: "Weak exports had a dampening effect on economic activity in the third quarter, while capital formation increased slightly."

Private consumption was also softer, down 0.3%, in contrast to stronger public consumption, up 0.8%.

Year-on-year, GDP was 0.3% higher, also in line with consensus.

Germany's economy - the biggest in the European Union, and traditionally heavily reliant on manufacturing - has struggled to gather pace in recent years.

It has been weighed down by a raft of factors, both domestic and international, including weak global demand, stiff overseas competition, high inflation and interest rates, uncertain consumer sentiment and Donald Trump's swingeing tariff regime.

Carsten Brzeski, global head of macro at ING, said: "How do you spell stagnation? G-E-R-M-A-N-Y. In the past three years, the German economy has recorded only two quarters of positive growth.

"Looking ahead, it would be great see the words 'stuck', 'in' and 'stagnation' disappear from the German economic dictionary for a while. Unfortunately, the very short-term outlook isn't promising.

"Beyond the current quarter, conditions should finally improve for the economy, though structural issues will remain."