German Economy Expected to Pick Up Pace in Fourth Quarter

(MENAFN) Germany is poised to see stronger economic growth in the fourth quarter, driven partly by rising government expenditure on defense and infrastructure, Bundesbank President Joachim Nagel said Wednesday.

Addressing an economic conference hosted by Latvia's central bank in Riga, Nagel said the latest economic assessments indicated a more robust recovery than the Bundesbank had anticipated during the summer.

“Economic growth is likely to accelerate in the fourth quarter,” he said.

Germany's gross domestic product expanded by 0.4% in the first quarter and 0.3% in the second. Preliminary figures indicated that the economy grew by 0.2% in the third quarter, despite disruptions to transportation caused by unusually low water levels in the Rhine River.

Nagel added that the International Monetary Fund, Germany's leading economic research institutes and the federal government were forecasting economic growth of approximately 1.3% this year, followed by 1.1% in 2027.

Industrial activity has shown signs of improvement, particularly in the chemicals and electrical equipment industries. Meanwhile, rising manufacturing orders indicate that the recovery could maintain its momentum.

Nevertheless, household spending remains weak, while investment in machinery and equipment contracted during the second quarter.

The Bundesbank is expected to publish its next detailed economic outlook in December.

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