Exports, investment boost German GDP

By Brian Rohan

BERLIN (Reuters) - German economic growth accelerated in the third quarter on firmer exports and investment in equipment and construction, the Federal Statistics Office said on Friday.

Preliminary figures showed gross domestic product (GDP) grew by 0.7 percent in the third quarter, slightly weaker than a consensus forecast for 0.8 percent growth. However, the previous quarter's expansion rate was revised up to 0.4 percent.

Euro zone government bond futures edged up at the open after the release of the data which coincided with news France's economy had grown 0.3 percent in the third quarter.

The Statistics Office said private consumption had been a drag on GDP but a pick up in imports was a sign firms were rebuilding their stocks.

"The inventory cycle has just started to turn and positive news will continue," said Carsten Brzeski at ING Financial Markets. "Moreover, filling order books and accelerating global demand point to a further pick-up in economic activity."

Year-on-year, the economy shrank by 4.7 percent in the third quarter, the data showed, following a 7.0 percent drop in the April-June period.

The government expects the economy to contract by 5 percent this year. However, a senior German official told Reuters on Tuesday a stronger-than-expected recovery in the second half suggested the government's forecast may be too pessimistic.

Germany, the world's biggest exporter of goods last year, has benefited from global stimulus programmes. Industrial output made its biggest quarterly gain in September since reunification in 1990, and exports rose for the fourth time in five months.