German Economy Stagnates In Q4

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Germany's economy stagnated in the fourth quarter of 2018, thus it avoided a technical recession, which is two consecutive quarters of contraction, preliminary data from the Federal Statistical Office showed on Thursday.

Gross domestic product was unchanged from the third quarter, when the economy shrunk 0.2 percent. Economists were looking for a modest increase of 0.1 percent.

Positive contributions to growth mainly came from domestic demand. Gross fixed capital formation grew strongly, especially in construction and machinery and equipment.

Household spending grew slightly, while government expenditure rose markedly.

Meanwhile, foreign trade failed to make a positive contribution to growth in the fourth quarter with both exports and imports rising at the same pace sequentially.

On a year-on-year basis, GDP rose an unadjusted 0.9 percent in the fourth quarter after a 1.1 percent increase in the previous three months. Economists had expected 0.8 percent expansion.

On a calendar-adjusted basis, GDP grew 0.6 percent year-on-year in the fourth quarter following 1.1 percent gain in the previous three months. Economists had forecast 0.8 percent growth.

The full year price-adjusted GDP growth for 2018 was revised down to 1.4 percent from 1.5 percent. Growth was the weakest since 2013, when the economy expanded 0.5 percent.

The calendar-adjusted growth figure was 1.5 percent, unchanged from the preliminary estimate released in January. The growth rate was the weakest in three years after a 1.5 percent expansion in 2015.