German third-quarter growth beats forecasts

15th November 2005, Comments 0 comments

15 November 2005, BERLIN - Germany reported a stronger-than-forecast 0.6-per- cent growth in the third quarter, the nation's statistics office said Tuesday, adding to hopes that Europe's biggest economy managed to shake off the impact of surging oil prices and continue along a growth path.

15 November 2005

BERLIN - Germany reported a stronger-than-forecast 0.6-per- cent growth in the third quarter, the nation's statistics office said Tuesday, adding to hopes that Europe's biggest economy managed to shake off the impact of surging oil prices and continue along a growth path.

The third-quarter growth rate, which represented a year-on-year expansion rate of 1.3 per cent, was higher than the 0.5 per cent forecast by analysts.

The statistics office also revised up the second-quarter growth rate from stagnation to 0.2 per cent.

However, the statistics office revised down its first-quarter growth estimate from 0.8 per cent to 0.6 per cent.

Once again Germany's booming export sector was the key force behind growth but with signs that in the domestic economy companies have been investing in equipment and plants.

The strong performance of the country's export machine helped to offset another weak quarter for private consumption in Germany.

However a key indicator released Tuesday showed that German investor confidence slipped in November as concerns set in about the direction of policy under Europe's largest economy's new government.

Compiled by the Mannheim-based Centre for European Economic Research, the so-called ZEW index fell back to 38.4 points in November from 39.4 points in October. The index stood at 38.6 points in September.

The fall this month cancelled out the perceived benefits of the recent slide in oil prices and this year's drop in the euro, which is seen as underpinning Germany's export machine.

The index's drop was in stark contrast to what economists had expected. They had forecast that the ZEW indicator would rise to 45 points.

Despite the decline in November, the index remains well above its historic average of 34.2 points.

Based on a survey of about 300 institutional investors and analysts, the ZEW survey acts as a curtain raiser to the release later in the month of the more broadly based and closely watched German Ifo business confidence survey.

Copyright DPA with Expatica

Subject: German news

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