At the end of the year, however, the recovery is likely to end for the time being due to the partial lockdown.
After the crash in the corona crisis, the German economy gained more momentum than initially assumed. The gross domestic product (GDP) rose in the period from July to September by 8.5 percent compared to the second quarter, as the Federal Statistical Office announced on Tuesday in Wiesbaden. According to preliminary data, the authority had assumed an increase of 8.2 percent.
At the end of the year, however, the recovery is likely to pause due to the partial lockdown in Germany and restrictions in many other European countries in view of the increasing number of infections.
With the strong growth in the third quarter, the German economy made up for a large part of the massive decline in gross domestic product from the spring, the authority said. In the second quarter of the year, GDP collapsed dramatically after large parts of public life had been shut down as a result of the corona. At the beginning of the year, economic output had already fallen compared to the previous quarter.
According to the information, the growth in the third quarter was supported in particular by higher private consumer spending (plus 10.8 percent) and strongly increased exports of goods and services (plus 18.1 percent). In addition, companies invested more in machinery and other equipment. On the other hand, there was no growth impetus from construction investments, they fell by 2.0 percent compared to the previous quarter.
In a year-on-year comparison, however, the corona crisis left deep marks. Compared to the third quarter of 2019, economic output in Europe's largest economy contracted by 3.9 percent after adjustment for prices.
According to the Deutsche Bundesbank and other economists, the current restrictions on public life will put an end to the economic recovery for the time being. The gross domestic product could “stagnate or even decline” in the final quarter of 2020, according to the central bank's latest monthly report. The prospective extension of the partial lockdown in Germany beyond November increases the likelihood of a decline in GDP in the fourth quarter from the perspective of economists. However, compared to the slump in March and April, this should be “very mild,” said Holger Schmieding, chief economist at Berenberg Bank.
According to all forecasts, the German economy will shrink in 2020 as a whole. The “economic wise men” assume a decline in the gross domestic product of 5.1 percent. The Council of Economic Experts is thus somewhat more optimistic than Economics Minister Peter Altmaier (CDU). The Ministry of Economics recently expected a slump of 5.5 percent. With the historical recession in 2009 as a result of the global financial crisis, this would be comparable to minus 5.7 percent at the time.
