Germany will probably avoid a recession. This is the conclusion that can be drawn from the Bundesbank's monthly report. The central bank explained that in the third quarter industrial production probably acts as a brake on growth, but consumer spending is doing quite well.
The performance of the German gross domestic product in the third quarter of the year should in fact be similar if not slightly better than that of the three months to 30 June, a period in which the leading European economy contracted by 0,2% on a quarterly basis to grow at a trend rate of 0,8%.
"The overall economic result will be at the levels of the second quarter or slightly better" writes the Bundesbank, referring to the positive data on employees and wages which should compensate for the slight slowdown in the industrial sector. This means that German GDP is either flat in the third quarter or rising slightly.
The dynamics of the GDP should also remain similar in the fourth quarter. "Taking into account the weak order books and depressed corporate morale, the last quarter of the year should also see modest performance."
Faced with this scenario, there is no doubt that Germany is not the growth engine expected but the slowdown is perhaps less drastic than feared.
Last week, the German government significantly reduced its growth forecasts for the current year and for 2015, bringing them respectively to +1,2% from +1,8% expected in April, and +1,3 .2% from the previous +XNUMX%.
