German economy feared to have stalled 

 

Germany's economy slipped into reverse in the last quarter of 2011 in spite of showing strong overall growth for the year of 3 per cent, the country's Federal Statistics Office said today.

The country's annual growth rate was achieved in spite of the financial crisis in Europe which has other economies such as Greece, Spain and Italy struggling with huge debts and slumping output. 

"The German economy again grew robustly in 2011," the German statistics office, Destatis, said in a statement. 

In 2010, the German economy grew by 3.7 per cent after a painful contraction of 5.1 per cent in 2009, which was by far its worst showing since World War II. 

While the 2011 growth figure was as expected by analysts, the statistics office also said that the German economy likely contracted by 0.25 per cent in the last quarter of 2011. The exact figure for fourth quarter growth is due only in mid-February and could be revised. 

The chief economist for Commerzbank, Joerg Kraemer, expressed little surprise regarding the slowdown and told German news agency dapd he expected the German economy to shrink in the first quarter of 2012 as well. 

Looking ahead, economic indicators also suggest 2012 will be a tougher year. 

"While the German economy grew very strongly in the last two years, this year's growth will be much lower, especially because of the crisis in the eurozone," Ferdinand Fichtner, the head of the DIW economic institute, said in a statement. 

Germany's 2011 growth puts it in a small group of strongly performing eurozone countries, along with Finland, Austria, Slovakia, and Luxembourg. France should see more moderate growth of around 1.7 for the year, according to the International Monetary Fund, while output stagnates amid high unemployment in Spain and Italy, the recent focus of the debt crisis. 

Greece and Portugal, bailed out to avoid default, remain in deep recessions. 

Germany should outperform the United States, which announces 2011 GDP on January 27. The IMF estimates the US economy grew 1.6 per cent over the year. The figure remains far short of emerging economies such as China, estimated at 9.5 per cent, and India at 7.8 per cent. 

Germany's strongest growth was seen in the first six months of the year, when consumer spending rose 1.5 per cent — the biggest increase in five years. 

Exports were also strong, according to Destatis, growing 8.2 per cent compared with the year before. Imports rose 7.2 per cent. 

Simon Junker, an expert with the DIW institute, warned that expectations for the economy in 2012 were damped by the eurozone crisis and that both exports and imports would slow down. 

"Germany's strongly export-driven economy will not be able to elude the slowdown of the global economy," Junker said. "Especially German exports will suffer from the eurozone crisis." 

However, the DIW said, there is reason to be optimistic if the eurozone governments "manage to quickly and believably contain the crisis." 

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Regional Sales Manager - OTE £100,000

£45000 - £100000 per annum: Recruitment Genius: A Regional Sales Manager is re...

Recruitment Genius: IT Support Engineer

£18000 - £22000 per annum: Recruitment Genius: The company provides IT support...

Recruitment Genius: IT Manager

£45000 - £55000 per annum: Recruitment Genius: This manager is for a successfu...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped Commission: SThree: As a Trainee Recruitm...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific