The economy is recovering more strongly than expected.
The crash was resounding, but now things are on the up again in great strides: The German economy is growing strongly in the third quarter, even more strongly than expected.
After the crash in the Corona crisis, the German economy gained more momentum than initially assumed. The gross domestic product (GDP) rose in July to September compared to the second quarter by 8.5 percent, as the Federal Statistical Office announced. According to preliminary data, the authority had assumed an increase of 8.2 percent. At the end of the year, however, the recovery is likely to pause due to the partial lockdown in Germany and restrictions in many other European countries because of the increasing number of infections.
In the second quarter of the year, GDP collapsed dramatically after large parts of public life had been shut down due to the corona. At the beginning of the year, economic output had already fallen compared to the previous quarter.
According to the Bundesbank and other economists
The third quarter’s growth was mainly driven by higher private consumer spending (plus 10.8 percent) and a sharp rise in exports of goods and services (plus 18.1 percent). Also, companies invested more in machines and other equipment. By contrast, there was no growth impetus from construction investments; they fell by 2.0 percent compared to the previous quarter. In a year-on-year comparison, however, the corona crisis left deep marks. Compared to the third quarter of 2019, economic output in Europe’s largest economy contracted by 3.9 percent after adjustment for prices.
The German economy will shrink in 2020 as a whole;
To the Bundesbank and other economists, the current restrictions on public life will end the economic recovery for the time being.
According to all forecasts, the German economy will shrink in 2020 as a whole. The “economic wise men” assume a decline in a gross domestic product of 5.1 percent. The Council of Economic Experts is thus somewhat more optimistic than Economics Minister Peter Altmaier (CDU). The Ministry of Economics recently expected a slump of 5.5 percent. This would be comparable to the time minus 5.7 percent with the historic recession in 2009 due to the global financial crisis.
The economy is recovering more strongly than expected.
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