Final German GDP Saw Stronger-Than-Expected Rebound

GERMANY Q3 FINAL GDP +8.5% Q/Q SA; -4.0% Y/Y WDA

GERMANY Q3 FINAL GDP REVISED FROM FLASH +8.2% Q/Q SA; -4.3% Y/Y WDA

• German GDP rebounded by 8.5% q/q in Q3, coming in slightly stronger than estimated in the flash results.
• Annual growth registered at -4.0% in Q3, up from -4.3% reported in the flash estimate.
• However, Q3 GDP was still 4% below Q4 2019 (the quarter before the pandemic)
• Household consumption was among the main drivers, rising by 10.8% in Q3, while government consumption rose by 0.8% following an increase of 2.2% in the previous quarter.
• Gross fixed capital formation in machinery and equipment ticked up 16.0%, while gross fixed capital formation in construction did not contribute to growth as it fell 2.0% q/q.
• Foreign trade contributed positively to economic growth in Q3 with exports increasing 18.1% and imports edging up 9.1%
• Despite the upticks on a quarterly basis, domestic demand is still lower compared to a year ago with household spending recording an annual reading of -3.7%, while investment in machinery and equipment was down 9.8% y/y.
• Only government consumption was up 4.3% in Q3 2020 compared to Q3 2019