Bureau of Statistics: Falling exports led to contraction of German GDP in the third quarter

BERLIN (Reuters) – Weak exports have been the main factor behind Germany's first economic contraction since 2015, data showed on Friday, confirming a negative preliminary reading of 0.2% in the third quarter .

The Federal Statistical Office said exports fell 0.9% in the quarter, while imports rose 1.3%, resulting in net trade deducting 1.0%. percentage point of growth.

"German economic growth is at a standstill," the statistics office said. "The slight decline in gross domestic product compared with the previous quarter is mainly due to the evolution of foreign trade."

The domestic front gave mixed signals, with investments in machinery, equipment and heavy vehicles up 0.8% over the previous year and 0.9% in construction.

At the same time, private consumption dropped by 0.3 percentage point, mainly due to a decline in new car purchases, showed the data.

The data confirmed the preliminary GDP data released on November 14, as private spending declined due to bottlenecks in the automotive sector related to the introduction of the WLTP factor.

"This can only be improved," said Thomas Gitzel, chief economist of the VP Bank Group. He added that the new WLTP test process had "left enormous skid marks in the German auto industry and consequently in private consumption and exports," but that it should not have only a temporary effect on consumption and exports.

He said private consumption, investment and construction would continue to fuel economic growth, but warned against waiting for "gigantic castles in the sky".

Compared with the same quarter last year, the economy grew 1.1% in the third quarter, according to calendar-adjusted data. "After 2.3% growth in the second quarter (year-over-year), a slowdown in economic growth is also evident here."

Preliminary data showed a 3.7% increase in imports of goods and services in the third quarter, compared to the previous year, with exports increasing 1.1% over the same period, indicated the statistics office.