German GDP grew more than expected in the third quarter

According to the report from the Federal Statistical Office (Destatis), the gross domestic product (GDP) rose by 8.5% in the third quarter of 2020 compared with the second quarter of 2020 after adjustment for price, seasonal and calendar variations. Thus, the German economy could offset a large part of the massive decline in the gross domestic product recorded in the second quarter of 2020 due to the coronavirus pandemic. However, the price-, seasonally and calendar-adjusted GDP was still 4.0% lower in the third quarter of 2020 thanin the fourth quarter of 2019, that is the quarter before the global coronavirus crisis. Destatis reports that the increase of the gross domestic product in the third quarter of 2020 was slightly stronger than reported in the first release of 30 October 2020 (+8.2%).

Due to the massive decline observed in almost all use areas in the second quarter of 2020, two-digit growth rates were recorded in the price-, seasonally and calendar-adjusted results of the third quarter of 2020 in some areas. Increasing by 10.8% on the previous quarter, final consumption expenditure of households contributed especially to growth in the third quarter of 2020. General government final consumption expenditure again rose by 0.8% on the preceding quarter, after a 2.2% increase in the second quarter. General government consumption thus stabilised economic growth during the first three quarters of the year. Gross fixed capital formation in machinery and equipment was up 16.0%. However, gross fixed capital formation in construction did not contribute to growth; it rather declined by 2.0% on the previous quarter.