German economy notches up ‘solid’ growth at end of 2015
Robust domestic demand enabled the German economy, Europe's biggest, to shrug off external headwinds and notch up "solid and continuous growth" at the end of last year, official data showed on Friday.
The federal statistics office Destatis said that Germany’s gross domestic product (GDP) expanded by 0.3 percent in the period from October to December, the same rate of growth as in the preceding three months.
“The economic situation in Germany was characterised by solid and continuous growth in 2015,” Destatis said.
Following GDP growth of 0.4 percent in both the first and second quarters, the economy grew by 0.3 percent in both the third and fourth quarters.
That resulted in expansion of 1.7 percent across the whole year, the statisticians said, confirming a preliminary estimate released last month.
“Positive impulses came primarily from domestic demand,” Destatis said.
State spending increased sharply and private household was up modestly.
“On top of this, investments also developed positively, with construction investment increasing significantly compared with the third quarter,” the statistics office said.
At the same time, foreign trade had a dampening effect on growth due to lower exports, it added.
Analysts were cheered by the latest GDP data.
“Now it’s confirmed. The German economy ended the year with a decent growth performance in the final quarter,” said ING DiBa economist Carsten Brzeski.
He acknowledged that the growth rate of 0.3 percent was slightly lower than expected and was “probably the result of an entire batch of disappointing hard December data.”
Nevertheless, “without any doubt, the performance of the German economy since 2009 has been impressive. In 27 quarters, the economy only shrank three times,” he said.
Moreover, the German economy had moved from being almost totally reliant on exports to much more balanced growth, with domestic factors currently shielding the economy against external headwinds, he noted.
Looking ahead, 2016 could be more challenging, Brzeski continued.
The refugee crisis, the economic slowdown in China and other emerging markets low oil prices and the possible weakness of the US economy “could all give the German economy a hard time,” he warned.