German economic growth unexpectedly accelerated to 0.4% in the fourth quarter of 2013 thanks to a rise in exports and capital investment, seasonally-adjusted data showed today.

The latest figures suggest that Europe's largest economy will pick up steam in 2014.

Coming after growth of 0.3% in the third quarter, the fourth quarter expansion beat the Statistics Office's estimate last month for "around a quarter of a percentage point" and the median forecast in a Reuters poll of economists for 0.3%. 

Preliminary data from the Statistics Office showed the economy grew by 1.3% on the year.

It said "mixed signals" came from the domestic economy, which has driven growth throughout most of the year, with public expenditure stable and private consumption slightly below the level of the previous quarter.

"Capital investment developed positively," the Statistics Office said. "However a strong reduction in inventories put the brakes on economic growth."

A bastion of strength during the early years of the euro zone crisis, the German economy slowed down towards the end of 2012 then picked up steam again from the second quarter of 2013 onwards, on the back of strong domestic demand.

The Economy Ministry said earlier this week that it expected growth of 1.8% in 2014 - more than four times faster than in 2013.