German GDP only grew by 0.9 per cent in 2005

12th January 2006, Comments 0 comments

12 January 2006, BERLIN - Germany's economy grew by 0.9 per cent last year, the Federal Statistics Office said Thursday.

12 January 2006

BERLIN - Germany's economy grew by 0.9 per cent last year, the Federal Statistics Office said Thursday.

Expansion was again powered by strong exports which grew by 6.2 per cent despite the strong euro. Domestic demand, which has been weak for the past decade, hardly improved during 2005.

Europe's biggest economy is expected to pick up speed this year and post growth of between 1.5 per cent and 1.7 per cent, analysts say.

The Federal Statistics Office also confirmed Thursday that Germany violated the eurozone budget deficit limit rule for a fourth year in a row in 2005.

The German budget deficit was 3.5 per cent of gross domestic product (GDP) last year, the statistics office said. Under eurozone regulations the budget deficit should not exceed 3 per cent of GDP.

In 2004 the deficit was 3.7 per cent and Berlin admits it will also again fail to keep to the limit in 2006.

But Finance Minister Peer Steinbrueck has vowed to get the deficit under 3 per cent by 2007.

E.U. member states would normally be subject to massive fines or economic directives from Brussels for overshooting the limit but sanctions have been put on ice for the past two years under a controversial deal with Germany and France, which has also overshot the deficit limit.

© DPA with Expatica

Subject: German news

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