BERLIN – Exports and rising business investments were the main drivers of growth for the German economy in the third quarter, data showed, signaling that the robust upswing in Europe’s largest economy will extend well into next year.
This should allay concerns about risks for the economy linked to Chancellor Angela Merkel’s failure to form a coalition government after an election in September, which raised the possibility of a second vote that could boost the far-right.
Detailed gross domestic product (GDP) data showed that exports rose 1.7 percent on the quarter and imports rose 0.9 percent, which translated in net trade contributing half of the quarterly growth reading of 0.8 percent.
Business investments in machinery and equipment were up by 1.5 percent, contributing 0.1 percentage points to growth. Household spending fell by 0.1 percent and state expenditure was flat.
The figures highlight the resurgence of exports as a driver of growth in an economy that has been relying mainly on private consumption and state spending for a growth cycle also supported by a booming construction sector and low interest rates.
“In the short term, the impact from the current political impasse on the German economy should be (close to) zero,” ING Diba economist Carsten Brzeski said.
“The economy has plenty of positive momentum and the external environment, including low-interest rates and the weak euro, remains favorable enough to shield the economy against political uncertainty,” he said.