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German economy avoids recession | German economy avoids recession |
(15 minutes later) | |
The German economy has narrowly avoided recession, growing 0.1% in the third quarter, the country's statistics office said. | The German economy has narrowly avoided recession, growing 0.1% in the third quarter, the country's statistics office said. |
With the economy contracting 0.1% in the April-to-May quarter, another negative figure would have meant Germany entering recession. | With the economy contracting 0.1% in the April-to-May quarter, another negative figure would have meant Germany entering recession. |
Earlier on Friday, figures from France showed stronger-than-expected growth of 0.3% for the third quarter. | Earlier on Friday, figures from France showed stronger-than-expected growth of 0.3% for the third quarter. |
Figures for other eurozone nations will be published during Friday morning. | Figures for other eurozone nations will be published during Friday morning. |
Germany's 0.1% contraction in the second quarter was a revision from a previous estimate of a 0.2% shrinkage in the April-to-May period. | Germany's 0.1% contraction in the second quarter was a revision from a previous estimate of a 0.2% shrinkage in the April-to-May period. |
The statistics office said German consumers had increased spending strongly during the third quarter period, and that exports had also risen. | The statistics office said German consumers had increased spending strongly during the third quarter period, and that exports had also risen. |
The figures will be seen as good news for the wider eurozone, whose sluggish growth has forced policymakers to cut interest rates and introduce other stimulus measures. | The figures will be seen as good news for the wider eurozone, whose sluggish growth has forced policymakers to cut interest rates and introduce other stimulus measures. |
Christian Schulz, senior eurozone economist at Berenberg Bank, told the BBC that confidence among German businesses was low, in large part because of worries about the Ukraine crisis. | Christian Schulz, senior eurozone economist at Berenberg Bank, told the BBC that confidence among German businesses was low, in large part because of worries about the Ukraine crisis. |
The German economy, for so long the eurozone's driving force, had been "a drag" in recent months, he said. | The German economy, for so long the eurozone's driving force, had been "a drag" in recent months, he said. |
'Positive surprise' | |
Earlier this week, a panel of advisors to the German government forecast growth of 1% next year following a 1.2% expansion in 2014. | |
It pointed to "geopolitical risks" such as the Ukraine crisis, but also criticised government policies such as plans to introduce a minimum wage next year. | |
Carsten Brzeski, an economist at ING-DiBa, said that "the German economy is nowhere near any abyss,", but said recent poor growth signals that it "could use a new reform impulse rather sooner than later". | |
In France, President Francois Hollande welcomed the country's latest growth data as a sign that it could reach its new target of 0.4% growth for the whole year. | |
However, that is less than half an initial estimate earlier this year. | |
Nevertheless, Mr Shulz said, the French growth came as a "positive surprise". | |
The 0.3% growth is the highest since the second quarter of 2013, and was slightly above the 0.2% growth forecast that many analysts had predicted. |