German growth increased in the third quarter owing to strong exports, according to the latest Bundesbank data, but the rise is unlikely to lift the gloom hanging over the biggest economy in the European Union.
Outgoing Economy Minister Wolfgang Clement also said today that the German government had cut its forecast for economic growth for 2006 to 1.2% from 1.6%.
The current figures indicated that gross domestic product 'clearly rose in the third quarter according to seasonally-adjusted data', the Bundesbank said in its monthly report for October. 'The upward movement of the German economy continued during the summer months after sideways movement in the second quarter,' it added.
In the second quarter, GDP stagnated after a rise of 0.8%over the first three months of the year. The Bundesbank gives no statistical data for the third quarter, but the DIW economic think tank expects growth in that period of 0.5%.
The Bundesbank said the economy was boosted by the industrial sector, 'which rose considerably, particularly thanks to a rise in orders from abroad'. It also noted positive movement in industrial investment and the construction sector but said consumer demand 'remained generally weak'.
Preliminary third-quarter GDP data will be published by the federal statistics office, Destatis, on November 15.
Germany's six biggest economic institutes said yesterday that exports will continue to drive the German economy amid lacklustre domestic demand.
Stimulating economic growth and cutting unemployment which is currently over 11% will be the main task of Germany's new coalition government to be led by the conservative Angela Merkel, which is currently engaged in four weeks of talks to hammer out a policy programme. The government is not expected to be sworn in until mid-November.
