German economy weaker than expected in third quarter

Germany lowered its growth estimate for the third quarter on Thursday, as clouds gathered over the economy with the coronavirus pandemic resurging.

The federal data agency said the economy expanded by 1.7 percent in the July to September period compared to the previous quarter, down 0.1 percentage points from a preliminary figure published last month.

“The German economy’s recovery continued through the summer,” Destatis said in a statement.

But growth was decelerating, with the third quarter figure easing from two percent posted in the second quarter.

With new curbs imposed again in recent days over record new Covid infections, experts have warned that output in the last three months of the year will be hard hit.

Already, an acute shortage of raw materials was crimping growth in Europe’s biggest economy.

Germany’s Bundesbank is now expecting output to be flat in the fourth quarter.

For the full year, the government forecasts that GDP will come in at 2.6 percent rather than the 3.5 percent previously predicted.

Germany announced record coronavirus fatalities and infections Thursday as its total death toll passed 100,000, with its most severe virus wave yet breaking just as a new government prepares to take the reins.

Europe’s largest economy recorded 351 fatalities in the past 24 hours, bringing the total death toll since the start of the pandemic to 100,119, according to figures from the Robert Koch Institute (RKI) health agency.

The weekly incidence rate also hit an all-time high of 419.7 new infections per 100,000 people, the RKI said. 

The escalating health crisis poses an immediate challenge to the new coalition government led by Finance Minister Olaf Scholz, who is set to take over as chancellor from Angela Merkel next month.