German Economy Can Continue Recovery Despite Warning Clouds Ahead

Dow Jones10-30

1325 GMT - Germany's economic recovery is likely to be sustained in the coming quarters, the Kiel Institute's Nils Jannsen says, after GDP expanded 0.2% in the third quarter. Recent business surveys support this outlook, especially given improving export expectations suggest that German firms may once again benefit more strongly from robust global economic activity, he says in a note. The AI boom, alongside rising defense spending, is also supporting production. Still, higher commodity prices will hurt households' purchasing power well into next year, given that some of the costs are passed on only with a lag. Any competitive advantage in German industrial firms over rivals in other regions more severely affected by the Middle East war has probably faded by now, he adds.

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