German growth ‘likely’ in third quarter

<p>German growth is likely to be recorded for the third quarter of the year.</p>

Germany is likely to post growth for the third quarter of the year despite the backdrop of the debt-addled eurozone.

This is according to the country's Finance Ministry, which believes this is thanks to a strong performance by German industry and firm shipments to areas outside the financially-troubled single currency region, Reuters reports.

In its monthly statement, the department said that exports "appear robust" in spite of the global economic downturn, with the most stimulus for this side of the market coming from non-eurozone markets.

"Expansion in German industrial production … likely gave significant growth impetus. Most analysts did not expect this given the deterioration in the business mood," the report added.

Many economists had anticipated the economy – which is the largest in both the 17-nation bloc and the wider European Union – would contract in the July-September period, particularly as Germany's closely-monitored Ifo business sentiment index has declined for five months in a row.

In the second quarter of the year, German growth slowed to 0.3 per cent from 0.5 per cent between January and March, as businesses postponed investments over concerns about the eurozone's financial woes.

The Finance Ministry stated there might be further weakening in economic activity in the final quarter of 2012 on account of the subdued business climate in other euro states, but the economy would improve next year.

Germany has powered its way through the first two years of the sovereign debt crisis, posting 4.2 per cent growth in 2010 and three per cent last year, when nations such as Greece and Portugal were seeking bailouts, while others like Spain fight to keep from falling into the financial abyss.

Last week, Berlin slashed its expectations for expansion in 2013 to one per cent from 1.6 per cent due to the weakened European economy, though it increased its forecast for this year by 0.1 per cent to 0.8 per cent.

At 09:30 BST the euro was firm in forex trading with the dollar to €1 buying $1.302 and versus the pound it slipped by 0.1 per cent to £0.812.

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