The Bundesbank sees the underlying momentum of Germany’s economy as remaining quite strong. According to the Bundesbank’s current Monthly Report, the German economy maintained its upward thrust in the third quarter, although it may have temporarily lost a little momentum. Third-quarter GDP growth figures will be published by the Federal Statistical Office on 13 November.

The Bundesbank’s economists identified robust consumption as being the main driver of the current upturn, with. growing employment a key factor in this. Moreover, households are benefiting from rising real incomes thanks to higher earnings and lower energy prices. The article explains that consumers are taking advantage of this favourable setting to increase their spending, thereby boosting turnover in the retail, automotive, and hotel and restaurant sectors.

The industrial sector, by contrast, has not yet taken off according to the Bundesbank. The Monthly Report notes that industrial output largely moved sideways, export business slipped below its previous very high level, and new orders faltered,  thus dashing hopes of a revival of industrial activity. The Bundesbank’s analysts are not expecting the situation to deteriorate, however.

Other topics

The October Monthly Report also features two headline topics. In the first of these the Bundesbank’s experts analyse German households’ saving and investment behaviour in the current low-interest-rate environment, while the second looks at the development of, and outlook for, government payroll spending.