German economy slows slightly after record bounce

12th November 2010, Comments 0 comments

Germany's economic growth slowed slightly in the third quarter, official statistics published on Friday showed, an expected deceleration after a record second quarter for Europe's top economy.

Gross domestic product (GDP) grew by 0.7 percent between July and September, Germany's statistics office said, after a jump of 2.3 percent in the second quarter of the year, the best performance for 20 years.

The 0.7-percent growth was slightly lower than forecasts by analysts surveyed by Dow Jones Newswires, who had expected growth of 0.8 percent.

"The upturn of the German economy continued, though at a slightly slower pace, as had been expected considering the record result of the second quarter," the statistics office said in a statement.

When compared with a year earlier, at a time of economic crisis, German GDP rose by an impressive 3.9 percent.

Significantly, the growth was broad-based, with both domestic and foreign demand making a positive contribution to the GDP figures.

Chancellor Angela Merkel has come under fire both from European partners and around the globe for not doing enough to boost domestic demand and relying too heavily on Germany's world-class export machine.

The global downturn hit Germany, the world's second-biggest exporter after China, especially hard as demand for its goods dried up. In 2009, it suffered the worst recession in 60 years with GDP contracting 4.7 percent.

However, as the rest of the world has recovered and started buying German products again, the economy has rebounded powerfully. Berlin expects growth of 3.4 percent this year, dipped to 1.8 percent in 2011.

© 2010 AFP

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