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Business

German economy slows amid eurozone growth worries

The slump in its main markets in Europe has slowed economic activity in Germany, causing third-quarter gross domestic product to expand only slightly. Consumption and exports have helped it stave off more dire straits.

Germany's GDP between July and September expanded by only 0.2 percent, according to latest data published by the German Federal Statistics Office, Destatis, Thursday.

The meager rate marked the third consecutive quarterly drop in German economic activity after growth of 0.3 percent and 0.5 percent in the second and first quarter of 2012, respectively.

Output expansion in Europe's biggest economy was helped by a pick-up in exports, notably to overseas countries, and by robust domestic consumption boosted by low unemployment and rising wages, Destatis said.

Destatis data also showed a year-on-year rise by 0.9 percent, supporting an official government forecast of 1 percent growth for the whole of 2012.

However, analysts expect the German economy to stagnate at best in the final quarter of 2012. Commerzbank analyst Jörg Krämer told Reuters news agency that Germany might have seen the last quarter of growth, as he expected output to shrink in the future and not to return to robust growth before the middle of next year.

Gustav Horn, economist at the Macroeconomic Policy Institute (IMK) told Reuters that Germany might even face a recession as latest data suggested German companies had stopped investing in capital goods used for production expansion.

uhe/kms (dpa, Reuters, AFP)