Germany's GDP to decline by 0.3 pct in Q3: think tank

Source: Xinhua| 2018-11-03 05:49:45|Editor: Chengcheng
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BERLIN, Nov. 2 (Xinhua) -- The German think tank of the Kiel Institute for the World Economy (IfW) predicted on Friday that German economic output in the third quarter (Q3) of 2018 would decline by approximately 0.3 percent.

The IfW's calculations are based on a preliminary estimate recently published by the European statistical office Eurostat, which include unpublished data on Germany's gross domestic product (GDP). Official data of German GDP will be published by the Federal Statistical Office (Destasis) in mid-November.

According to the IfW, the decline in economic output in Germany was due to production losses in the automotive industry caused by the introduction of the new test standard for exhaust gases and consumption figures for cars -- the worldwide harmonized light-duty vehicles test procedure (WLTP).

"German manufacturers did not complete the new test procedure for all vehicle types in time and therefore had to reduce production in the third quarter," IfW stated. "In addition, transportation problems in inland shipping as a result of the low water levels of German rivers may have hampered production in other sectors of the economy, such as the chemical industry."

Already at the beginning of August, chemical giant BASF, among others, was forced to reduce production due to logistical problems caused by low water levels of the river Rhine. Water levels on Germany's most important waterway fell below the historic low of 2003 in October but are starting to rise again.

"Overall, the weak third quarter should be largely attributable to extraordinary effects and thus not allow any conclusions about the general economic situation," said Stefan Kooths, head of the IfW Forecasting Centre. "We therefore expect economic output to improve significantly in the final quarter of the year."