Stronger domestic demand spurred an acceleration in German economic growth in the third quarter, data showed today.
German GDP grew by 0.7 per cent in seasonally adjusted terms compared with the second quarter, the Federal Statistics Office said today, confirming a preliminary estimate from earlier this month.
But a slowdown appears likely as the year ends with the euro and oil prices surging to record highs.
A breakdown of the details showed that domestic demand was solely responsible for growth, with net trade subtracting. Private consumption added 0.3 percentage points to GDP growth, while the rise in inventories added 0.4 points.
The outlook for Germany and the rest of the euro area has been clouded by a jump in oil prices to record highs close to $100 per barrel. The rise has been partly offset by the strength of the euro, which has reached record highs against the dollar.
However, economists say firms feel the negative impact on price competitiveness caused by the euro's rise more than they do the relief it brings them on the cost of oil.