German economy contracts slightly in third quarter

(Sharecast News) - The German economy contracted a touch in the third quarter, as per the initial estimate, according to figures released on Friday by Destatis. GDP shrank by 0.1% on the previous quarter, following a 0.1% increase in Q2.

On the same quarter a year earlier, GDP contracted 0.4% in the third quarter.

Ruth Brand, president of the Federal Statistical Office, said: "After the weak economic development seen in the first half of 2023, the German economy began the second half of the year with a slight drop in performance."

Carsten Brzeski, global head of macro at ING, said: "Today's data will do very little to end the debate on whether or not the German economy is again the sick man of Europe. In any case, the German economy has become one of the growth laggards of the eurozone.

"This weak growth performance has a long list of explanations: there is the cyclical headwind stemming from inflation, still elevated energy prices and energy uncertainty, higher interest rates and China's changing role from being a flourishing export destination to being a rival that needs fewer German products. But there are also well-known structural challenges, ranging from demographics to energy transition and not enough investment."