Germany’s Federal Statistical Office (Destatis) has announced that the country’s economy grew less than expected in the third quarter of 2024.

German GDP grew by 0,1 percent compared to Q2

Destatis has announced that in the third quarter of 2024, the German economy grew by just 0,1 percentage point more than the previous quarter. Initial projections predicted a quarterly growth rate of 0,2 percentage points. 

Household consumption, which typically makes up around 60 percent of GDP, rose by just 0,3 percentage points compared to the second quarter, while government spending rose by around 0,4 percent.

"The German economy barely moved forward in the third quarter, continuing the trend of virtually no growth in the eurozone's largest economy," Chief Eurozone Economist at Pantheon Macroeconomics Claus Vistesen told Reuters.

Which factors scuppered Germany’s economic growth?

The German economy has been lagging behind the European Union average since 2021, only narrowly avoided recession this year and is expected to come out as the worst-performing country among the seven richest democracies in 2024.

An export economy, Germany’s decline in exports was a key factor in the quarterly drop. Exports were down by 2,4 percentage points compared to the previous quarter.

The ongoing crisis that erupted at Volkswagen in September has also played a role. Struggling with increased production costs and competition from abroad, particularly from China, the German company announced it would close at least three factories and lay off thousands of employees.

Work’s council representatives at Volkswagen are now in discussion with management about where money can be saved without jeopardizing jobs.

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