Germany's economy grew 0.2% in Q3 — faster than forecasts

Growth above expectations amid difficulties

Germany's economy in the third quarter of 2026 grew by 0.2% — faster than analysts surveyed by FactSet had forecast (0.1%). These are preliminary figures from the statistical office Destatis, published on Friday, October 30. The growth was recorded despite the energy shock from the US war with Iran and low water levels on major rivers, which complicated industrial logistics.

What supported growth and what held it back

The growth was driven by an increase in government and private spending. The defense and infrastructure spending program promoted by Chancellor Friedrich Merz is, according to AFP, giving the economy a significant boost this year. At the same time, exports noticeably weakened momentum in the first half of the year, and investment declined. GDP expansion turned out to be weaker than in the first two quarters. Individual manufacturers, especially in chemicals and petroleum products, suffered from transport problems caused by the Rhine's low water levels during the summer heat; last week the central bank warned that restrictions on inland waterway transport were 'putting pressure on industry'. ING economist Carsten Brzeski noted that the economy is heading toward its best result since 2022. Unemployment in October remained at 6.4% amid a sluggish labor market recovery.

Contrast with France

Against the backdrop of German growth, the French economy — the second largest in the eurozone — contracted by 0.1% in the third quarter. Data for the eurozone as a whole were due to be released later the same day. Germany's chemical industry, according to AFP, benefited from having been hit less hard by supply chain problems than some of its global competitors, despite rising energy prices.