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German economy avoids recession | German economy avoids recession |
(about 1 hour later) | |
The German economy has narrowly avoided recession, growing by 0.1% in the third quarter, figures show. | |
The growth, together with stronger-than-expected expansion in France of 0.3%, helped the eurozone as a whole to grow by 0.2% in the quarter. | |
The eurozone figure marks an improvement from the 0.1% growth seen in the second quarter of the year. | |
The figures from Eurostat also showed Greece's economy emerged from recession in the first quarter of the year. | |
However, Italy returned to recession after its economy contracted 0.1% in the third quarter - the 13th quarter in a row that it has failed to grow. | |
German spending up | German spending up |
With Germany's economy having contracted 0.1% in the April-to-May quarter, another negative figure would have meant the country entering recession. | |
But the statistics office said German consumers had increased spending strongly during the third quarter period, and that exports had also risen. | |
The figures are 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' | 'Positive surprise' |
Earlier this week, a panel of advisers to the German government forecast growth of 1% next year following a 1.2% expansion in 2014. | Earlier this week, a panel of advisers 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. | 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". | 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. | 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. | However, that is less than half an initial estimate earlier this year. |
Nevertheless, Mr Shulz said, the French growth came as a "positive surprise". | 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. | 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. |