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Germany’s GDP Flat in Q3, Recession Narrowly Averted

Weak exports signal a fragile private economy with hopes for 2026 tied to fiscal support.

Overview

  • Destatis’ preliminary estimate shows GDP at 0.0% quarter on quarter and up 0.3% year on year, with Q2 revised to −0.2% from −0.3%.
  • Exports fell versus the prior quarter while investment in equipment rose; detailed Q3 composition is due on 25 November.
  • Germany avoided a technical recession by the narrow revision, yet business sentiment remains weak and employment fell for a fifth month in September (−21,000 seasonally adjusted).
  • Performance lagged major euro-area peers, with France growing 0.5% and Spain 0.6% in Q3, while Italy reported a contraction.
  • Forecasters see stagnation or a small gain around 0.2% in 2025 and a modest 2026 upturn driven mainly by planned public spending on infrastructure and defense.