Domestic demand helped drive Germany to 0.5 percent growth in the third quarter, the statistics office said, as Europe's largest economy temporarily sidestepped an expected global slowdown.

In seasonally adjusted terms, gross domestic product accelerated from an upwardly revised 0.3 percent in the April-June period, in line with economists' expectations.

The statistics office said that private consumption had made a particularly important contribution to the rise, which was also driven by investment in plant equipment.

With clouds gathering on the horizon however, economists said they did not expect Germany to be able to fend off a looming euro zone recession and escalating sovereign debt crisis much longer.

Although German domestic demand should be more resilient and buffer part of the decline in industrial output and exports, total GDP will probably contract noticeably in the fourth quarter, said Aline Schuiling from ABN AMRO.

Germany recovered swiftly from the 2008/09 financial crisis, but signs have grown that the economy is entering a quieter phase as the sovereign debt crisis weighs on business sentiment.

As the euro zone's largest economy and growth engine for the past two years, any hiccups in the coming business quarters would have wider effects in the region.

Many economists have been revising their forecasts downward in recent days.

Last week, the country's panel of wise men economic advisors said they expect growth this year to land at a healthy 3 percent, but only 0.9 percent in 2012, slightly below the 1.0 percent forecast by the government.

The 2012 government forecast itself was already almost halved last month from a previous 1.8 percent.

Tuesday's data showed that on an annual basis, growth eased to 2.5 percent compared to the same quarter a year earlier, after 3.0 percent in the previous quarter.

The figures matched consensus forecasts made in a Reuters poll of economists.

Quarterly growth had been initially reported at 0.1 percent for the second quarter, while annual growth had earlier stood at 2.8 percent.

(Additional reporting by Alexandra Hudson, Veronica Ek)