Germany's economic growth slowed more than expected in the third quarter, official data showed Tuesday, as analysts warn the risk of heightened protectionism under a Donald Trump presidency threatens to dent Germany's future exports.
Germany's gross domestic product grew at a quarterly clip of 0.2% in the three months through September, or 0.8% in annualized terms, the Destatis statistics office said. That is the weakest pace in a year and well below the U.S.'s annualized growth rate of 2.9%.
Economic activity in the third quarter was mainly driven by domestic consumption, Destatis said, as spending by households and the government increased from the second quarter. Net trade, however, weighed on GDP growth. Investment in plant and machinery was weak too.
Europe's largest economy is forecast to grow 1.9% this year, according to the German government's council of economic advisers. But business executives and analysts warn that the risks of heightened protectionism in the wake of Mr. Trump's presidency and the U.K.'s pending exit from the European Union could hurt Germany's export prospects in the year ahead.
Illustrating this concern, the U.S. in 2015 was the top destination for German exports, with the U.K. following in third place, according to Destatis. Germany's bilateral trade surplus with the U.S. in 2015 accounted for about 1.8% of Germany's GDP.
"If Trump goes ahead and erects trade barriers as planned, the damages will be huge," Clemens Fuest, the president the Ifo institute, said last week. He estimated that 1.5 million jobs in Germany depend on trade with the world's largest economy.
The EU statistics agency later Tuesday is expected to confirm that the eurozone economy expanded by 0.3% in the third quarter from the previous period, according to a poll of economists by The Wall Street Journal.
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(END) Dow Jones Newswires
November 15, 2016 03:15 ET (08:15 GMT)
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