The German economy, Europe’s largest, grew by 0.2 percent in the third quarter slowing a little further as the continent struggles with its persistent debt crisis but performing slightly better than expected.
The figure for quarter-on-quarter growth released on Thursday by the Federal Statistical Office compared with an expansion of 0.3 percent in the second quarter and 0.5 percent in the first three months of this year. It is a bit stronger than the 0.1 percent growth that was widely expected.
Germany enjoyed robust growth over the past two years, but the debt crisis that has pushed several European countries into recession has hit confidence and threatened to weigh on exports.
Many economists believe the German economy may slacken further over the winter months before regaining momentum next year.
For now, the economy is proving to be “more resilient than expected,” said Carsten Brzeski, an economist at ING in Brussels. “The strong labour market, wage increases but above all the good old friend exports are the main drivers of sustained resilience.”
While the outlook for the next few months is less rosy, “the risk for the economy of falling off the cliff looks very limited,” Brzeski added. He noted that other countries in the 17-nation eurozone account for only about a third of German exports, which should enable the country “to benefit quickly from any rebound of the global economy.”
Third-quarter gross domestic product figures for the full eurozone are due later on Thursday.
France avoids recession
France’s economy narrowly avoided a recession, growing slightly in the third quarter, according to official statistic released on Thursday.
The French economy hasn’t recorded growth since the third quarter of last year and had been widely expected to start its slide into recession in the third quarter technically defined as two consecutive quarters of negative gross domestic product. Instead, Insee, the national statistics agency, said GDP rose 0.2 percent on an annualized basis in the July-to-September period.
But the agency also revised down figures for the second quarter, saying the economy shrank 0.1 percent then. It had previously said growth was stagnant, as it had been for the previous two quarters.
Fixing France’s economy amid a European-wide crisis is President Francois Hollande’s biggest challenge. He has promised to rein in massive government spending and reduce the deficit, largely by raising taxes.
But those measures have put a stranglehold on growth, and the country has watched unemployment tick steadily up as a raft of companies announced layoffs in recent months. The jobless rate now stands at 10.8 percent, according to European statistics.