German economy rebounds faster than expected in Q3

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After the easing of restrictions related to COVID-19, German gross domestic product (GDP) in the third quarter recovered 8.5% from the previous quarter, the Federal Statistical Office Destatis announced on Tuesday.

The German economy “made up for much of the massive drop” in GDP caused by the COVID-19 pandemic in the second quarter, but was still 4% lower than in the third quarter of 2019, before the start of the COVID-19 crisis.

“The rebound in German GDP in the third quarter of 2020 was stronger than most forecasters expected,” said Axel Lindner, deputy head of the macroeconomics department at the Halle Institute for Economic Research.

Meanwhile, a sign that record mortgage rates are supporting homebuyers’ interest, new home sales in the United States held firm in October, remaining near the best rate since 2006 and well above the levels of. before the pandemic.

The Commerce Department said on Wednesday that new home sales fell only 0.3% to an annual rate of 999,000 in October after rising 0.1% to a revised rate of 1.002 million in September. .

Economists expected new home sales to jump 1.1% to a rate of 970,000 from the 959,000 initially reported for the previous month.

Separately, a report released last week by the National Association of Realtors unexpectedly showed a continued increase in sales of existing homes in the United States in October, with sales surging 4.3% to a low. annual rate of 6.85 million.

Finally, UK business activity contracted in November as a new wave of COVID-19 restrictions hammered through the huge service industry, but news of potential vaccines strongly boosted hopes for 2021, a report revealed. survey Monday. The initial reading of the IHS Markit / Chartered Institute of Procurement & Supply Composite Production Index fell to 47.4 in November from 52.1 in October. This is the first time that the index has fallen below the growth threshold of 50.0 since June.

However, the forward-looking component of the index hit its highest reading in more than five years, boosted by advances in COVID-19 vaccines.

This article has been compiled by Bank of Valletta for general information purposes only.

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