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German economy expands faster in third quarter

German economy

BERLIN: The German economy grew at a faster pace than expected in the third quarter, official data showed Thursday, as robust foreign demand kept Europe’s top economy humming.

Gross domestic product (GDP) expanded by 0.8 percent between July and September compared with the previous quarter, adjusted for seasonal swings, the statistics office Destatis said in a statement.

“German economic growth continues at a high rate,” it said.

The preliminary figure beat expectations, as analysts surveyed by Factset had forecast 0.6 percent growth.

“Exports were stronger than imports in the third quarter. As a result, net exports had a positive impact on the GDP compared to the previous quarter,” according to Destatis.

Government and consumer spending “remained rather stable” in the third quarter, it added, while noting that investments had increased, particularly “in machinery and equipment”.

Destatis also revised upwards its first-quarter figure, saying the German economy accelerated by 0.9 percent in the first three months of 2017 instead of the earlier reported 0.7 percent.

Second-quarter growth was confirmed at 0.6 percent.

The German government last month sharply upgraded its full-year growth forecast to 2.0 percent, up from 1.5 percent previously.

For 2018, it is pencilling in growth of 1.9 percent.

Europe’s largest economy has in recent years been powered by strong domestic demand, boosted by record low unemployment, low inflation and low energy prices.

But the economy ministry expects domestic consumption to slow down in coming years, while buoyant foreign demand for “made in Germany” goods is once again expected to become the main driver of growth.

Exports are forecast to rise by 3.5 percent this year and 4.0 percent in 2018, according to the ministry.

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