Bloomberg News

German Economic Growth Will Stagnate in Fourth Quarter, DIW Says

October 26, 2011

Oct. 26 (Bloomberg) -- The German economy, Europe’s biggest, will fail to grow in the current quarter after expanding 0.4 percent in the previous three-month period, the DIW economic institute said.

“In the third quarter, businesses still benefited from good orders from the previous months,” the Berlin-based institute said today in an e-mailed statement. “Industrial companies likely expanded production significantly and pushed German growth forward.”

DIW said consumers and companies are probably delaying big- ticket purchases and investment as the euro region’s debt crisis undermines confidence. That will damp growth in the fourth quarter and the first quarter of 2012, it said.

German business sentiment fell to a 16-month low last week as the possibility of a Greek default threatens banks and clouds the outlook for economic growth. At the same time, German unemployment fell for a 27th straight month in September, taking the jobless rate to 6.9 percent, the lowest since reunification two decades ago.

--With assistance from Jeff Black in Frankfurt. Editors: Fergal O’Brien, Eddie Buckle

To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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