German economy returned to growth

The German economy returned to growth, signaling that the slow recovery conquered the region. German gross domestic product grew by 0.1% in the three months to the end of September after falling 0.2% in the previous quarter, avoiding recession. The GDP of France also reported increase of 0.3%, which is the strongest growth in more than one year after two consecutive quarters of stagnation.

The analysts predicted growth in the third quarter from 0.1% in the two economies and provide the same rate of expansion of the economies of the 18-nation region.

The fragile recovery of the Eurozone is at risk, since the economic weakness and the countries covered in the center of the region. Because of the slow growth and inflation close to its lowest level in five years, the European Central Bank provided unprecedented incentives and urged governments to invest and implement structural reforms to support growth. However, the data is positive surprise, as ECB should be reassured by the fact that domestic demand remains stable and consistent with a slightly stronger momentum towards the end of the year.

In Germany, growth for the third quarter was driven by private consumption, with a small contribution of trade, the statistical office said. In addition, foreign trade support the German economy – exports increased more than imports. In contrast, however, investments are shrinking – mainly because companies invest “significantly less” in machinery or vehicles.

The EUR currency was slightly affected after the report, depreciate slightly by 0.3% to 1.2436 USD.

The Eurozone economy is likely to expand by 0.1%.