During the third quarter of 2020, Germany's GDP recorded a significant increase in its y/y variation rate compared to the previous quarter, increasing up to a rate of -4.02%. The gradual recovery of the economic activity compared to 2Q20 was partially due to the significant increases recorded by private consumption and exports. As for the labor market, the unemployment rate registered an increase over the previous quarter, up to a rate of 4.50%, while the y/y employment variation decreased down to -1.43%. As for inflation, it registered a rate of -0.09%, after decelerating with respect to 2Q20. Finally, the euro appreciated against the US dollar compared to the previous quarter, and recorded an average exchange rate of 1.17 $/€ during the third quarter of the year.

 


Macroeconomic outlook report: Germany 3Q20

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Macroeconomic overview

  • During the third quarter of the year, the German economy recorded an increase in its y/y GDP variation rate of 7.23 p.p. compared to the previous quarter, up to a rate of -4.02%. This was partly due to the gradual recovery of private consumption and exports, motivated by the relaxation of the containment measures throughout the beginning of the third quarter.
  • Domestic demand increased by 4.58 p.p., after every component except public consumption partially recovered compared to 2Q20. With respect to the external demand, the trade balance partially recovered as the performance of exports improved to a greater extent than that of imports. Exports recorded a significant increase of 12.96 p.p., and registered a variation rate of -9.36% in 3Q20.
  • With regards to the labor market, the unemployment rate increased compared to the previous quarter to a rate of 4.50%, while the y/y employment variation decreased by 0.15 p.p. compared to the previous quarter, down to a rate of -1.43%.
  • The euro appreciated against the US dollar compared to the second quarter of 2020, recording an average exchange rate of 1.17 $/€ in 3Q20.
  • Inflation stood at -0.09% during the third quarter of 2020, after recording a decrease of 1.45 p.p. compared to the previous quarter.

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