Exports, consumption drive meager German growth in third quarter

Fri Nov 23, 2012 2:53am EST
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By Annika Breidthardt and Michelle Martin

BERLIN (Reuters) - Exports and private consumption helped Germany to keep growing in the third quarter of 2012, albeit at a slower rate than previously, as Europe's largest economy felt the pinch of the euro zone crisis.

The Federal Statistics Office on Friday confirmed its initial estimate that German gross domestic product growth slowed 0.1 percentage points to 0.2 percent in the three months to end-September.

The breakdown showed exports supported growth in the third quarter, rising 1.4 percent, while government spending gained 0.4 percent and private consumption was up 0.3 percent.

Germany held up strongly during the first two years of the debt turmoil that has hammered Europe but a slide of a number of the continent's economies into recession and a worsening global outlook has prompted companies to hold off on investments.

The seasonally-adjusted data showed gross capital investment made no contribution to German growth in the third quarter.

"Businesses are investing less in machines and other equipment. The only explanation for that is a crisis of confidence - which means the German economy will lose more speed," said Holger Schmieding of Berenberg Bank.

Chipmaker Infineon (IFXGn.DE: Quote) has already said it will cut planned investments.

"The tough savings measures in southern Europe, weaker growth in China and uncertainty over the euro crisis are all contributing factors," said Schmieding.   Continued...

Cars for export stand in a parking area at a shipping terminal in the harbour of the northern German town of Bremerhaven, late October 8, 2012. REUTERS/Fabian Bimmer