Europe’s biggest economy shrank in the third quarter

Output in Germany fell in the third quarter, official data showed Monday, increasing the risk of a recession in Europe’s biggest economy.

Gross domestic product dropped 0.1% in the July-to-September period compared with the previous quarter, when it grew 0.1%, according to Germany’s Federal Statistical Office (Destatis).

A fall in consumer spending drove the decline. On the other hand, investment by companies into machinery and equipment made a positive contribution to GDP, Destatis said.

The data bodes ill for the entire area that uses the euro because Germany is the largest of its 20 economies.

“Germany’s economy is once again teetering on the brink of a technical recession,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. A technical recession is defined as two consecutive quarters of declining output.

— This is a developing story and will be updated.