The German economy shrank by 0.2 percent in the fourth quarter of 2011, as the euro crisis began to bite. But the contraction was less than expected, and economists expect Germany to avoid the recession plaguing many countries in the euro crisis. Leading indicators point to a resumption of growth by mid-2012.
The German economy, Europe’s largest, shrank by 0.2 percent in the fourth quarter from the previous quarter, slightly less than the 0.3 percent drop expected, official figures released on Wednesday showed.
The contraction was the first decline in GDP since early 2009, the height of the financial crisis. The Federal Statistics Office blamed the drop on weakening exports and consumer spending. However, analysts remain upbeat that Germany’s downturn will be brief and that the economy will resume growing in mid-2012. Leading indicators such as the Ifo business climate index and the ZEW institute’s poll of economic sentiment remain strong.The figures, together with stronger-than-expected GDP growth of 0.2 percent in France in the final quarter, indicated that Europe’s two biggest economies may be able to avoid the recession ravaging many countries as a result of the debt crisis.German GDP for 2011 as a whole grew by 3.0 percent, the Statistics Office said. The German government expects GDP growth of 0.7 percent overall in 2012.
- Germany and France Q4 GDP figures better than expected (newstatesman.com)
- German economy slips into reverse in last quarter (independent.co.uk)
- German economy heads into reverse (bbc.co.uk)
- Germany May Be on Brink of Recession After GDP Decline: Economy (businessweek.com)
- Data Show German Economy Stalling – New York Times (nytimes.com)