German 3Q GDP Confirms Moderate Growth, Domestic Demand Key

Talking Points:

• Germany’s 3Q Final QoQ GDP confirmed at a seasonally-adjusted 0.3%
• 3Q year-on-year GDP confirmed at a seasonally-adjusted 1.7%
• Domestic demand main contributor to GDP, foreign trade dragged

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Final Gross Domestic Product (GDP) figures released today by the German Federal Statistics Office largely confirmed Flash estimates from earlier this month. The German economy grew a seasonally-adjusted 0.3 percent in the third quarter of 2015, matching the flash estimates. The year-on-year change in GDP also came in line with the flash estimates at 1.8% (1.7% when calendar-adjusted). The report confirmed the German economy continued to grow at a modest pace.

Looking into the report, German private spending increased 0.6 percent in Q3, above the 0.5 percent expected by economists and the prior revised 0.1 percent. Domestic figures showed an addition of 0.7 percent in Q3 versus the prior contraction of negative -0.2 percent. Government spending increased by 1.3 percent, above the expected 0.5 percent and the prior revised reading of 0.1 percent. These figures were considered as the main contributors to Germany’s growth in Q3.

On the other hand, net trade came at 0.4 percent, with imports printing a rise of 1.1 percent, above the expected 1.0 percent and well above the prior revised 0.5 percent. Exports rose 0.2 percent, below the expected 0.4 percent, and below the prior revised 1.8 percent. Capital investment shrank by 0.3 percent.

The report signaled that German domestic demand was able, at least for the moment, to counter negative pressures on growth stemming from weaker global trade, presumably led by a slowdown in China and emerging markets.