German GDP rises 0.7 per cent

A build up of inventories helped German gross domestic product (GDP) grow 0

A build up of inventories helped German gross domestic product (GDP) grow 0.7 per cent in the third quarter of 2009, despite a drag from private consumption and foreign trade, according to official data released today.

The Federal Statistics Office said inventories added 1.5 percentage points to GDP and gross capital investment added 0.2 per cent. Private consumption and net trade both subtracted 0.5 points.

Europe's largest economy exited its sharpest recession since World War Two in the second quarter, growing by 0.4 per cent. Prior to that, GDP had contracted for four quarters in a row.

The Finance Ministry said on Friday that GDP growth is likely to slow in the final quarter of 2009, adding that the euro's strength against the dollar is having a negative impact on German businesses.

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Year-on-year, the economy shrank by 4.7 per cent in the third quarter, the data showed, following a 7 per cent drop in the April-June period, matching preliminary estimates.

Adjusted for working days, German GDP contracted by 4.8 per cent on the year in the third quarter. In the second quarter, it shrank by 5.8 per cent.

Reuters