Germany's economic growth slows sharply in 2012

Car factory Germany is Europe's largest economy and the world's second largest exporter

The German economy grew by 0.7% in 2012, a sharp slowdown on the previous year, preliminary figures show.

The figure was well below the 3% growth seen in 2011 and suggests the economy contracted in the fourth quarter.

"In 2012, the German economy proved to be resistant in a difficult economic environment and withstood the European recession," the federal statistics office Destatis said.

Some analysts believe the German economy will enter recession itself.

Destatis said economic activity "slowed down considerably" in the second half of the year, and particularly in the final quarter.

"The full-year growth figure [of 0.7%] implies a contraction of around half a percentage point in the fourth quarter," the office's top statistician Norbert Raeth said.

Last month, Germany's central bank, the Bundesbank, cut its growth forecast for this year to 0.4% and warned that the economy may have contracted in the final three months of 2012, and may do so again in first quarter of 2013.

The eurozone economy as a whole is already in recession, having contracted in both in the third and fourth quarters of last year.

Spending boost

For 2012 as a whole, Destatis said foreign trade was "very robust", with exports up 4.1% on 2011. Imports grew by 2.3%. The positive trade balance was "once again the main driving force for economic growth in Germany".

Household expenditure increased by 0.8%, while government spending was up 1%.

The figures also showed that while the service sector of the economy expanded, industry and construction contracted.

Destatis will publish official fourth-quarter growth figures on 14 February.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

Elsewhere on the BBC

  • FutureThe future is now

    Get the latest updates and biggest ideas from BBC Future’s World-Changing Ideas Summit

Programmes

  • Smart glassesClick Watch

    Smart spectacles go into battle – the prototypes looking to take on Google Glass

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.