Growth of the German economy, the biggest in the 12-country euro zone, effectively came to a standstill in the fourth quarter of last year on the back of weak consumer spending, official data showed today.
German gross domestic product was unchanged in the three months from October to December compared with the preceding three months, the federal statistics office, Destatis, calculated in preliminary data.
Growth was therefore lower than expected - consensus analyst forecasts had been pencilling in modest growth of 0.2% in the three-month period. It also represented a sharp slowdown from the previous quarters.
German GDP had expanded by 0.6% quarter-on-quarter in the first three months of 2005, by 0.3% in the second quarter and by 0.6% again in the third quarter.
'The only growth impulses came from investment, particularly in construction,' Destatis said in a statement. 'But those impulses were offset by the decline in private and public-sector consumer spending,' the statisticians explained.
The German economy is traditionally driven by strong exports, while domestic demand has been stuck in the doldrums for years. Recent data have, however, indicated that domestic demand is also finally beginning to pick up.
On a 12-month basis, GDP expanded by 1% in the October-December period of 2005 compared with the same period a year earlier, Destatis continued.
That also represented a slowdown from the third quarter, when GDP had risen by 1.4% year-on-year, but the figure was partially distorted by the fact that there was one less working day in the last three months of 2005 than in the year-earlier period. Adjusted for that calendar effect, GDP grew by 1.6% year-on-year in the October-December period.
