Germany’s economy grew by 0.2 percent in the third quarter of this year, escaping a technical recession. The German Federal Statistical Office (Destatis) released preliminary growth data for the country’s economy covering the third quarter of the year. Seasonally and calendar-adjusted gross domestic product (GDP) in Germany increased by 0.2 percent in the third quarter compared to the previous quarter, driven by an increase in household and public expenditures. As a result, the economy, which had shrunk by 0.3 percent in the revised second quarter, did not fall into a technical recession, defined as two consecutive quarters of GDP decline. Market expectations had been for the economy to grow by 0.1 percent. Growth data for the second quarter, initially announced as a 0.1 percent decline with preliminary data, was revised down to a 0.3 percent drop. Positive contributions to quarterly growth came from increases in household and public spending. Annual GDP growth, freed from calendar effects in the third quarter, was also at a negative 0.2 percent. Weak foreign trade is cited as one of the reasons why the German economy failed to achieve the expected growth. Germany’s economy is facing challenges in growth due to increasing interest rates, cyclical risks, and structural changes. Factors such as unusually high inflation affecting purchasing power, high energy prices, declining investments, weak external demand, and high interest rates caused the economy to shrink by 0.3 percent compared to the previous year. As the only G7 country to shrink within the group, the government expects a 0.2 percent contraction in the economy this year. If Germany contracts again this year, it will be the only shrinking economy among the G7 economies, as it was in 2023.