The German economy avoided a technical recession in the third quarter thanks to household and government consumption.

A preliminary estimate from Germany’s federal statistical office, Destatis showed today that the economy grew by 0.2 per cent from a quarter ago, confounding expectations for a contraction of 0.1 per cent. However, the statistical office downwardly revised the fall for the second quarter to 0.3 per cent from 0.1 per cent.

With the latest growth, the largest Euro Area economy avoided a technical recession. On a yearly basis, calendar-adjusted Gross Domestic Product (GDP) recorded an expansion of 0.2 per cent, reversing the second quarter’s 0.3 per cent decline and confounded expectations for a drop of 0.3 per cent.

Detailed results will be released on November 22.

Meanwhile, the price-adjusted GDP grew 0.2 per cent on year, following a 0.1 per cent rise in the prior quarter. Detailed results will be released on November 22 with data published today by the Federal Employment Agency showing the unemployment rate remaining unchanged at 6.1 percent in October. This is in line with expectations.

The number of people out of work increased 27,000 from the previous month after rising 19,000 in September. This was bigger than the forecast of 17,000. Federal Employment Agency chairwoman, Andrea Nahles said the autumn recovery in the labour market was absent this year. 

Eurozone growth beats forecasts 

Eurozone GDP grew by 0.4% in the third quarter of this year, twice as fast as the 0.2% growth expected. This, follows Germany’s welcome dodging of a recession, and France’s Olympics-fuelled growth over the summer, which were seen in data published today.

France and Spain showed better-than-expected growth, while Italy stagnated in the third quarter. As the Paris Olympic and Paralympic Games boosted consumption, the French GDP growth doubled to 0.4 per cent from 0.2 per cent in the second quarter. 

This was also better than economists’ forecast of 0.3 per cent. Underpinned by domestic demand, Spain’s GDP grew 0.8 per cent on a sequential basis, the same rate as seen in the second quarter. Growth was forecast to ease to 0.6 per cent.

Italy’s GDP remained flat in the third quarter, following a 0.2 per cent rise in the second quarter. Economists had forecast the economy to log another 0.2 per cent expansion.

Ireland (+2.0%) recorded the highest increase compared to the previous quarter, followed by Lithuania (+1.1%) and Spain (+0.8%). Declines were recorded in Hungary (-0.7%), Latvia (-0.4%) and Sweden (-0.1%). The year-on-year growth rates were positive for seven countries and negative for six.