German GDP Rises 0.2% in Q3, Beating Forecasts on State Infrastructure and Defense Spending

Germany's gross domestic product grew 0.2% in the third quarter from the prior period, preliminary statistics office data showed Friday, slightly above the 0.1% rise forecast by analysts polled by Reuters. Year over year, the economy expanded 1.3% in price-adjusted terms, marking a fourth straight quarter of recovery for Europe's largest economy. The office said household and government consumption rose slightly, while the strong export growth seen in the first half of 2026 slowed noticeably. The economy grew 0.3% in the second quarter and 0.4% in the first. Analysts attributed the recovery mainly to increased public spending on infrastructure and defense. Alexander Krueger, chief economist at Bethmann HAL bank, said that "without this artificially initiated impulse, economic output would probably have stagnated." Jens-Oliver Niklasch of LBBW said next year would show whether the revival is sustainable, noting investment has yet to pick up substantially. The government expects 1.3% growth in 2026 and 1.1% in 2027. The Ifo business climate index rose for a sixth straight month in October.