The German economy slightly decreased in the third quarter, pressured by weak purchasing power of citizens and higher interest rates, data from the statistical office showed on Monday.
Gross domestic product (GDP) fell by 0.1 percent in the three months ending in September compared to the previous three months, according to price-adjusted, seasonally and calendar-adjusted data from Destatis.
In the second quarter, however, economic growth was achieved at a modest 0.1 percent, following stagnation in the first three months of this year, revised data from the statistical office for both quarters show.
The previous data indicated stagnation in the second quarter and a 0.1 percent decline in activity in the first three months, the tables show.
Destatis highlights weaker household consumption as a particularly unfavorable factor, given that high inflation eroded consumer purchasing power during the period from July to September.
The burden on consumption was the raised interest rates. The European Central Bank raised them by 4.5 percentage points since July last year to curb inflation in the eurozone. Last week, they maintained them at the current level, assessing that they have restrained price growth by slowing down consumption.
Positive contributions to German GDP in the period from July to September came from gross investments in equipment and machinery, the statistical office reported.
Compared to the third quarter of last year, the largest European economy fell by 0.8 percent, according to price-adjusted data. In the second quarter, activity decreased by 0.4 percent year-on-year.
When excluding calendar factors, the rate of decline was 0.3 percent because the third quarter of this year had one working day less than the same period last year, explains Destatis.
