BERLIN, October 30 (.) – Germany’s gross domestic product (GDP) increased by 0.2% quarter-on-quarter in the third quarter of this year, the Federal Statistical Office (Destatis) announced this Wednesday. An economic recession occurs when the economy slumps for two consecutive periods.
However, the same source said it was down 0.2% compared to the same quarter in 2023.
The second quarter results have been revised to -0.3% from the initial forecast of -0.1%.
The news came as some surprise, as most economists had expected the economy to contract and enter a recession. Destatis said this slight recovery was mainly due to increases in private consumption and public spending.
The Ifo Institute for Economic Research’s business conditions index, one of the key early indicators, rose in October after four consecutive declines.
However, there remains skepticism about whether Germany’s economy will be able to escape from the crisis it is facing, with Germany’s central bank, the Bundesbank, believing the downturn that began in 2022 will continue.
“Economic activity may trend towards a slowdown in the fourth quarter. A recession in the sense of a general and long-term downturn in the economy is not expected, but it is the first slowdown since mid-2012. “It’s going through stages,” he said. The German Bundesbank’s annual report states:
The IMF is also predicting a stagnation in the German economy and pointing out problems in the industrial and real estate markets.
The German Federation of Chambers of Commerce and Industry (DIHK) has predicted, based on a survey of business leaders, that the economic downturn will continue into 2025.
The German government is also pessimistic, predicting that the economy will contract by 0.2% this year as a whole.
This is the second consecutive year of GDP decline.
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