The German economy, the biggest in the euro zone, shrank by 0.1% in 2003, its worst performance in a decade, as a recession in the first half of the year outweighed a modest recovery in the second half.
Official figures this morning showed that gross domestic product contracted by 0.1% in real or price-adjusted terms, the first annual drop in GDP since 1993.
The German government had been forecasting zero growth for 2003 after the economy had expanded only marginally by 0.2% in 2002 and by 0.8% in 2001.
Weighing on activity last year was weak household consumption, which fell by 0.2%. The strong euro also hit exports, which grew by only 1.1%, while imports rose by 2%.
Other figures showed that Germany chalked up a public deficit equivalent to 4% of GDP last year, well in excess of a euro zone limit of 3%. It is the second year in a row that the German deficit ratio has exceeded the limit after it amounted to 3.5% in 2002.
* The Bank of France says the French economy grew 0.6% in the fourth quarter 2003, up from an earlier estimate of 0.5%, and raised its forecast for the first quarter 2004 by 0.3 points to 0.7%. But it lowered its estimate of French growth for all of 2003 by 0.1 points to 0.1%.
