Germany's economy records slower-than-expected growth in Q3 2024.
Destatis Reports Slower-Than-Expected Growth in Germany’s Economy for Q3 2024
Germany's Federal Statistical Office (Destatis) revealed that the nation's economy expanded at a slower pace than anticipated in the third quarter of 2024.
Economic Growth Falls Short of Projections
German GDP grew by just 0.1% compared to the previous quarter, falling short of earlier predictions of 0.2% growth. Household consumption, which accounts for roughly 60% of GDP, increased by a modest 0.3%, while government spending rose by 0.4%.
Commenting on the situation, Claus Vistesen, Chief Eurozone Economist at Pantheon Macroeconomics, told Reuters: “The German economy barely moved forward in the third quarter, continuing the trend of virtually no growth in the eurozone's largest economy.”
Key Challenges to Economic Growth
Germany’s economy has struggled to keep pace with the European Union average since 2021. It narrowly avoided a recession this year and is projected to be the worst performer among the G7 countries in 2024.
The country's reliance on exports contributed significantly to the slowdown, with exports declining by 2.4% compared to the previous quarter.
Additionally, the ongoing crisis at Volkswagen has further exacerbated economic difficulties. Facing higher production costs and stiff competition from international markets, particularly China, Volkswagen announced plans to close at least three factories and lay off thousands of workers. Discussions between the company’s management and workers' council representatives are ongoing to identify cost-cutting measures while protecting jobs.