German Economy Stagnates As Estimated In Q3

(RTTNews) - The German economy stagnated in the third quarter as growth in investment was offset by the weakness in exports, revised data from Destatis showed on Tuesday.

The statistical office Destatis confirmed that gross domestic product remained unchanged on a quarterly basis, following a decline of 0.2 percent in the second quarter.

"Economic activity was hampered in the third quarter by weak exports, while investments increased slightly," Federal Statistical Office President Ruth Brand said.

The expenditure-side of GDP showed that gross fixed capital formation increased 0.3 percent, following the decline in the previous quarter. Investment in equipment, primarily machinery, tools and vehicles grew 1.1 percent from a quarter ago. On the other hand, construction investment fell 0.5 percent.

Overall consumption remained flat in the third quarter. Private consumption declined 0.3 percent, which was the first fall since the fourth quarter of 2023 as households spent less on restaurants and accommodation services. By contrast, government spending advanced 0.8 percent from a quarter ago.

Foreign trade provided no positive impetus to the growth. Exports of goods and services were down 0.7 percent, while imports remained flat from the previous quarter.

The economy will remain stuck until fiscal stimulus begins to take effect, ING economist Carsten Brzeski said.

"With the German parliament expected to approve the 2026 budget this week, this year's public underinvestment combined with next year's full-scale fiscal stimulus should be enough to get a new spelling of the word stagnation next year," the economist added.