Germany’s economy fell in Q3, but it was better than expected. Significant drag was consumer spending, being offset by capital investments.
- Gross domestic product fell by 0.1% quarter on quarter in adjusted terms, the federal statistics office said. A Reuters poll had forecast the economy to shrink by 0.3%.
Year on year the economy fell 0.3%, and 0.7% was expected. \
"The German economy looks set to remain in the twilight zone between minor contraction and stagnation not only this year but also next year, ING’s global head of macro Carsten Brzeski said
“The net result, however, is that Germany’s economy is now firmly stuck in the mud,” Pantheon Macroeconomics’ chief eurozone economist Claus Vistesen said, adding the he doubts the economy will make headway in the fourth quarter.
Inflation continues to decline, but core inflation is expected to stabilize at around 3%
-
German inflation eased in October to 3.0%, the federal statistics office said on Monday. German consumer prices, harmonised to compare with other European Union countries, had risen by 4.3% year-on-year in September.
-
Core inflation, which excludes volatile food and energy prices, fell to 4.3% in October from 4.6% in the previous month.
While headline inflation is likely to ease further in the first few months of the coming year, the core inflation rate should stabilise around 3% by spring at the latest, Commerzbank economist Ralph Solveen said.
“We expect underlying inflation to remain significantly higher than the ECB would like in the coming year,” Solveen said.
https://www.reuters.com/markets/europe/german-economy-shrinks-slightly-q3-2023-10-30/