1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Germany narrowly avoids recession

November 14, 2019

The German economy has surprised experts by growing slightly in the third quarter. The narrow escape was largely due to consumer spending.

Euro coins
Image: dapd

The German economy grew an unexpected 0.1% in the third quarter, data released on Thursday showed. 

Figures from the German statistics office Destasis showed positive growth in gross domestic product from July to September compared to the previous quarter. The growth allowed Europe's largest economy to narrowly sidestep a recession.

Read more:  Opinion: Where the heck is this recession?

In the second quarter lasting from April to June, the economy shrank by 0.2%. A further quarter of negative growth, as experts expected, would have met the criteria for what economists call a "technical recession", or two consecutive quarters of negative economic growth. The last technical recession in Germany was at the end of 2012. 

When strengths become weaknesses

The manufacturing focus that made the country rich has proven an Achilles heel over the past 18 months. Brexit and the US-China trade war have disrupted manufacturing supply chains and hurt investor confidence. The automobile branch, a pillar of the German economy, is struggling under sinking demand as it tries to pull off the expensive transition away from diesel engines.

But other economic indicators paint a more complex picture. Destasis reports that consumer spending was largely to thank for third quarter economic growth. Last week Germany's statistics office reported that export figures for September were better than expected. In recent months, many in Germany have stressed that it is a mistake to only consider total economic growth when evaluating the health of an economy. 

Room to improve

Last week the German government's independent panel of economic advisers reported that their analysis found no signs of a "broad, deep recession". The government has largely resisted calls to use its significant budget surplus on stimulating the economy . 

Read more: Does Germany need a stimulus package to cope with recession?

While a recession may have been avoided for now, room for improvement remains. On Thursday, German Economy Minister Peter Altmaier told journalists, "We do not have a technical recession, but the growth numbers are still too weak."

Every evening, DW sends out a selection of the day's news and features. Sign up here.

kp/aw (AFP, dpa, Reuters)