BERLIN • Germany's economy shifted into an even higher gear in the third quarter, propelled by buoyant exports and rising company investments in equipment, data showed yesterday.
In a further positive sign for Europe's biggest economy, the Zew institute said investor morale improved this month and prospects for the economy remained "encouragingly positive", thanks to high levels of growth across Europe.
Germany is enjoying a consumer-led upswing, helped by record-high employment, moderate inflation and ultra-low borrowing costs. The upturn is boosting tax revenues and the Budget surplus, which should help Chancellor Angela Merkel seal a tricky three-way coalition agreement in the coming weeks.
Seasonally adjusted gross domestic product (GDP) rose by 0.8 per cent on the quarter, Statistics Office data showed yesterday. This beat a consensus forecast in a Reuters poll of 0.6 per cent, which was also the second-quarter growth rate.
The German economy grew by 2.3 per cent on the year in the third quarter, unadjusted data showed.
Adjusted for calendar affects, the yearly growth rate rose to 2.8 per cent in the July-September period from 2.3 per cent in the previous quarter, the office said. This was the strongest reading since the beginning of 2014.
The Federal Statistics Office also revised up the quarterly growth rate for the first quarter to 0.9 per cent from 0.7 per cent. "This makes an upward revision for overall growth estimates likely," DekaBank analyst Andreas Scheuerle said.
The government expects the economy to grow 2 per cent this year and 1.9 per cent next year.
This would translate into calendar-adjusted rates of 2.2 per cent and 2 per cent respectively.
The Statistics Office said positive impulses for growth in the third quarter came mainly from net foreign trade as exports increased more strongly than imports.
"While state and household consumption remained roughly on the previous quarter's level, gross capital investments contributed to overall growth," the office said.
In its monthly report, the economy ministry said the solid economic upswing would stretch into the fourth quarter. "The indicators point to a brisk continuation of the upswing in the final quarter of the year," it said.