Germany's Economy Contracts in Q3, Facing Spending Crisis and Dim Outlook

Germany's economy contracted by 0.1% in the third quarter, confirming the initial estimate. Weak economic performance, high energy costs, weak global orders, and higher interest rates have contributed to Germany's sluggish growth. Private consumer spending decreased by 0.3%, while government consumer spending increased by 0.2%. A court ruling blocking the transfer of pandemic funds to green investment has created uncertainty and could further dampen growth. The Bundesbank predicts that the German economy will shrink again in the fourth quarter before showing slight improvement in early 2024.