Germany dodges recession, posts surprise growth on spending boost [Video]

The German economy unexpectedly grew in the third quarter as domestic spending increased, official data showed Wednesday, defying expectations of a slowdown that would have tipped the European giant into a technical recession.

Gross domestic product expanded 0.2 percent quarter-on-quarter, federal statistics office Destatis said in preliminary data, on the back of rising government spending and household consumption.

The government had been expecting “a renewed slight decline” after output fell in the second quarter.

But Germany — which has been stuck in stagnation in recent years as it battles high energy costs, cooling exports and increased Chinese competition — narrowly avoided entering a technical recession defined as two consecutive quarters of contraction.

It wasn’t all good news however, as Destatis revised downwards its figure for the second quarter, saying the economy contracted by 0.3 percent instead of the previous estimate of a 0.1-percent decline.

The third-quarter figure was “a positive …