The German economy did not end up in a recession last quarter. Whereas analysts assumed that there would be a contraction for the second quarter in a row, the economy managed to show anemic growth of 0.1 percent.

The German economy contracted by 0.2% in the second quarter, so it was expected that this trend would continue. In that case, due to two quarters in a row, there would have been a recession – even if it was a small one.

German growth is supported, as in more places in the world, by increased consumer spending. Government spending also had a positive impact. However, companies’ investments fell back.

It is not the first time that the largest economy in the eurozone has started sputtering. In the third quarter of last year, the economy was already shrinking by 0.2%, but even then the economy squeezed out the next quarter just a little.

The growth in the past quarter does not mean that the German economy is running smoothly again. Many economic indicators are at a low point, and less than 1% growth is still expected for this year and next year. Certainly the German car industry is having a hard time. And that weakness in industry spreads to the rest of the economy. The number of vacancies, a precursor to higher unemployment, is falling.

Germany has been sitting back for too long. Rabobank concluded this in a report that was published last week. “The export figures were so good for years, that took the pressure off to innovate,” said economist Erik-Jan van Harn.

Germany has also become increasingly dependent on exports. In 2000, 27% of the gross domestic product depended on exports. That figure almost doubled in 2019, calculated Rabobank. And it is precisely this export that is sensitive to the headwind in the world economy, partly due to Brexit and the trade war between China and the US.

At half past nine this morning the Central Bureau of Statistics will announce the Dutch growth figures for the third quarter.

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