BERLIN: A rise in German private consumption and higher state spending on refugees more than compensated for weakness in foreign trade, helping Europe’s biggest economy to grow at a modest, albeit slower pace in the third quarter, data showed on Tuesday.
The Federal Statistics Office confirmed an earlier flash estimate showing seasonally adjusted gross domestic product (GDP) grew by 0.3 per cent on the quarter between July and September, after expanding 0.4 per cent betweeen April and June.
Private consumption rose 0.6 per cent in the third quarter, while state spending jumped 1.3 per cent — the biggest rise since early 2009. Overall, domestic demand added 0.7 percentage points to GDP.
“Of course, the refugee costs are playing a role here. These are the first effects on state spending,” an official at the Statistics Office said.
On the downside, exports climbed at a slower pace than imports as demand from China and emerging markets weakened. Net foreign trade thus subtracted 0.4 percentage points from GDP — the weakest contribution for two years.
