Rolling coverage of the latest economic and financial news, including the latest German GDP report
- NEWSFLASH: Germany misses recession by a whisker
- Economy stalled in October-December, after shrinking over the summer
- Economist: It’s another black eye
- Trade woes pull German economy back
- Coming up: Eurozone growth figures at 10am
Here’s Associated Press’s take on the German growth report:
Germany narrowly avoided a recession in the fourth quarter, reporting only zero growth as foreign trade made little contribution to Europe’s largest economy.
The lackluster figure released Thursday by the state statistics agency followed a 0.2% fall in output during the preceding third quarter. Business spending on machinery and equipment as well as construction supported the economy in the fourth quarter and kept Germany from suffering two straight quarters of negative growth, one definition of a recession.
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Claus Vistesen, economist at Pantheon, says Germany’s economy was held back by weak net trade and sluggish consumers’ spending.
He fears that the eurozone growth figures, which will be updated at 10am, will be lowered from 0.2% to just 0.1% for the last quarter.
Just as bad as we feared, adding to our conviction that today’s second estimate quarter-on-quarter for the eurozone as a whole will be revised down, by 0.1pp, to 0.1%.
We don’t see numerical details in this report, but the statistical office provide hints, indicating that domestic demand, mainly investment in construction and machinery and equipment, and government spending supported the economy. By contrast, growth in consumers’ spending remained subdued, and net exports remained a severe drag on headline GDP growth.