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Germany averts recession after unexpected third-quarter growth

Germany averts recession after unexpected third quarter growth

Economic data released on Thursday showed that the German economy has averted recession, reinforcing the Bundesbank's position that no measures should be taken to stimulate the economy until necessary.

German statistics office report showed that the preliminary GDP reading signaled 0.1 percent growth during the third quarter of 2019, supported by consumer and governmental spending. That defied market expectations of a 0.1 percent drop.

In the second quarter, the German economy contracted by 0.2 percent, which means that another drop would have driven the economy into the first recession in six years.

The year-on-year growth accelerated to 0.5 percent from 0.3 percent, coming better than forecasts of 0.4 percent growth.

“We do not have a technical recession, but the growth numbers are still too weak,” Economy minister Peter Altmaier has warned.

Given the strong headwinds facing Europe’s locomotive, such as global slowdown, trade war and Brexit uncertainty, today’s growth results are pleasant.

Meanwhile, the euro currency traded slightly lower against the U.S dollar at 1.1012.

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