Germany GDP Q4 2015


German economy expands at steady pace in Q4, full-year 2015 growth ticks up

The German economy grew at a steady pace in the final quarter of 2015 as stronger public spending and fixed investment compensated for slower private consumption growth and a poorer performance of the external sector. GDP rose a seasonally-adjusted 0.3% in Q4 over the previous quarter, according to more complete data published by the Federal Statistics Office (Destatis) on 23 February. The expansion matched Q3’s increase, the preliminary estimate as well as met market expectations. Compared to the same quarter of the previous year, GDP increased 2.1% in Q4, which came in above the 1.7% expansion registered in Q3. In the full year 2015, GDP grew 1.7%, which marked a slight acceleration over 2014’s 1.6% and the largest gain in four years.

In Q4, fixed investment accelerated from Q3’s 0.1% quarter-on-quarter expansion to a 1.5% increase, which marked an almost two-year high. In addition, government consumption growth sped up from 0.5% in Q3 to 1.0% in Q4, which was the fastest pace of growth in nearly six years. Conversely, private consumption growth slowed from 0.6% in Q3 to a softer 0.3% in Q4.

On the external front, exports of goods and services deteriorated, swinging from a 0.3% rise in Q3 to a 0.6% contraction in Q4, which represented the lowest reading in three years. At the same time, imports slowed from a 1.1% expansion in Q3 to a 0.5% increase in Q4. Dragged down by falling exports, the external sector’s net contribution to overall economic growth deteriorated further from Q3’s minus 0.3 percentage points to minus 0.5 percentage points in Q4, which was the weakest result in three years.

The government expects economic activity to increase 1.7% in 2016. FocusEconomics Consensus Forecast panelists expect economic activity to expand 1.8% in 2016, which is unchanged from last month’s forecast. For 2017, the panel forecasts GDP growth of 1.7%, which is also unchanged from last month’s forecast.

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Germany GDP Chart

Germany GDP Q4 2015

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Federal Statistics Office (Destatis) and FocusEconomics Consensus Forecast

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