Germany: Numerous GDP components show double-digit growth rates – VP Bank column

This is a set of figures for the history books. Germany’s gross domestic product (GDP) increased by 8.5% in the third quarter compared to the previous quarter, a little more than the estimates were. Compared to the same quarter of the previous year, however, GDP was 4% lower.

In view of the second Corona wave and the resulting negative economic consequences, the figures for the third quarter seem like a fading, beautiful dream. The summer not only allowed a life largely free of contact restrictions, but also resulted in record high growth.

All components of the GDP grew strongly, above all exports with an incredible increase of 18.1% and investment in equipment with an increase of 16%. But private consumption is also making a leap upwards with an increase of 10.8%. This means that the German economy can make up for a large part of the massive decline in the 2nd quarter of 2020.

The balance sheet for the fourth quarter meanwhile deteriorates almost daily. The high number of infections will keep the all-important Christmas business in retail out on a narrow track. The hotel and restaurant industry will also only achieve a fraction of the normally good turnover in December. In any case, the service sector will weigh heavily on GDP in the fourth quarter. The manufacturing industry provides compensation. Production is still going relatively well. On balance, GDP will shrink in the final quarter.

But as sad as the economic outlook for the winter months is, the GDP figures for the third quarter also give cause for hope. If life goes back to normal, lush growth rates are possible. That gives at least confidence for the spring and summer months. Precisely because, with the good news from vaccine developers, there is a prospect of immunization for broad sections of the population in the second half of 2021.

Security data: Economy
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