The German economy remained ‘fairly robust’ according to a report from Cushman and Wakefield after GDP grew by 0.5% during Q3 2011. The increase follows on from a 0.1% deceleration in Q2.

Despite this growth, inflation increased during September 2011 as it rose 0.2% from the previous month to 2.6%. This was explained in the report: ‘September’s figure represents the highest inflation rate since the onset of the global financial crisis when climbing oil prices pushed up headline inflation. Despite recent declines in oil prices, petrol prices added to the relatively higher inflation rate and remained 10% higher in September than during the same period last year.’

Germany’s economy however is anticipated to still grow in 2011 by 2.9% before it starts a decrease in 2012 by 1.3%, which is likely due to the problems in Greece. The report stated: ‘ Germany has a relatively large exposure to Greece which is increasingly likely to default on its debt. Although Germany should avoid returning to recession, growth will be severely muted due to market uncertainty over contagion.’

Consumer spending started the quarter well as unemployment fell to 6.6% nationally, with it expected to continue to decline. Retail sales remained at 4.5% month on month although the industrial sector saw a fall of 1% in August after a 3.9% increase in July. The report said: ‘Recovery in industrial production was short-lived and Augusts’ figure demonstrated how the slowdown in global demand growth and the strength of the euro weakened one of the strongest sectors in Europe. While output is still showing moderate growth, manufacturing demand appears to be in contraction territory.’