Private consumption spike helps Germany avoid recession in third quarter

Reuters News
Posted: Nov 25, 2014 2:23 AM

BERLIN (Reuters) - A sharp rise in private consumption more than compensated for stubborn weakness in investment, helping the German economy post modest growth in the third quarter and avoid recession, data showed on Tuesday.

Germany's Federal Statistics Office confirmed an earlier flash estimate showing a 0.1 percent rise in seasonally-adjusted gross domestic product (GDP) on the quarter between July and September.

Private consumption rose 0.7 percent quarter on quarter, the biggest increase in three years, and exports climbed at a faster pace than imports, helping trade make a positive 0.2 percentage point contribution in the third quarter.

On the downside, equipment investment tumbled by 2.3 percent, while gross capital and construction investment also fell. Overall, investment subtracted 0.7 percentage points from GDP in the quarter.

(Reporting by Stephen Brown, Noah Barkin and Erik Kirschbaum)