German economic growth slowed to 0.7% in 2012

15 Jan 13
The German economy grew by just 0.7% last year after slowing down considerably in the last six months, the country’s Federal Statistical Office revealed today.

By Nick Mann | 15 January 2013

The German economy grew by just 0.7% last year after slowing down considerably in the last six months, the country’s Federal Statistical Office revealed today.

Its provisional figures for the year show Europe’s largest economy suffered from a sharp fall in investment, but exports rose.

The figure compares unfavourably with the 3% recorded in 2011 and 4.2% in 2010. The statistical office attributed this to the country ‘catching up’ following the world economic crisis. In 2009, the economy shrank by 5.1%.

Roderich Egeler, president of the Federal Statistical Office, said today’s data showed that in 2012 ‘the German economy proved to be resistant in a difficult economic environment and withstood the European recession’.

Despite this, output fell by 0.5% in the final three months of 2012, leading to speculation that the government will now trim its official growth forecast of 1% for 2013 to as low as 0.4%. Germany’s central bank, the Bundesbank, has already cut its growth forecast for 2013 from 1% to 0.7% and warned that the country could enter recession this year.

Germany’s export strength was the ‘driving force’ behind its growth last year, the statistical office said. Exports of goods and services grew by 4.1%, while imports rose by just 2.3%. This balance of exports and imports contributed 1.1% of overall gross domestic product growth.

However, while household and government consumption increased – by 0.8% and 1% respectively – investment in machinery and equipment fell by 4.4% and in construction by 1.1%.

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