German economy rebounds 0.2% in Q3 2024 but faces ongoing challenges

According to preliminary estimates, the German economy grew by 0.2% quarter-on-quarter in Q3 2024, marking a recovery from a 0.3% decline in Q2 and surpassing expectations for a 0.1% contraction.

German economy rebounds 0.2% in Q3 2024 but faces ongoing challenges

Notably, final consumption from both government and households saw an uptick. The Q2 data was revised to reflect a more significant contraction of 0.3%, compared to earlier estimates of a 0.1% decline. On a year-on-year basis, GDP decreased by 0.2%, indicating the sixth consecutive quarter without growth, following a downwardly adjusted 0.3% drop in Q2. The German government is projecting a 0.2% GDP contraction for 2024, which would signify the country’s first two-year recession since the early 2000s, following a 0.3% decline in 2023.

Germany faces challenges but forecasts 1.1% GDP growth in 2025

The economy is grappling with considerable challenges, including high energy costs, weak external demand, and declining competitiveness in the automotive sector. However, the government anticipates a rebound in 2025, forecasting a 1.1% GDP growth driven by increased private consumption, renewed demand for industrial exports, and a revival in investment activities.