Germany: GDP contracts in the last quarter of 2011
February 24, 2012
In the fourth quarter, GDP contacted a seasonally and working-day adjusted 0.2% over the previous quarter, which contrasted the revised 0.6% expansion observed in the third (previously reported: +0.5% quarter-on-quarter), but bettered market expectations that had GDP falling 0.5%. The fourth quarter reading represents the first contraction since the first quarter 2009. Compared to the same quarter the previous year, GDP increased 1.5% in Q4, slower than the 2.6% expansion observed in Q3. The fourth quarter contraction reflected both a deterioration in the external sector and softer growth in domestic demand. Private consumption contracted 0.2% in Q4 (Q3: +1.2% qoq), while government consumption grew just 0.1% in the final three-month period (Q3: +0.6% qoq). On the other hand, gross fixed investment accelerated from a 0.3% expansion in the third quarter to a 1.1% increase in the fourth. Exports of goods and services swung from a 2.6% expansion in Q3 to a 0.8% contraction in Q4. In the same vein, imports fell 0.3% over the previous quarter, which contrasted the 2.7% expansion observed in the third quarter. As a result, the external sector's net contribution to overall economic growth deteriorated from a 0.1 percentage-point contribution in the third quarter to an 0.3 percentage-point detraction in the fourth. For the full year 2011 the economy grew 3.0%, which follows the strong 3.7% expansion registered in 2010. The Bundesbank, however, anticipates that economic growth will moderate to only 0.6% this year, before accelerating to 1.8% in 2013.
Author: Ricardo Aceves, Senior Economist