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Europe
German economic growth falls flat
Europe's biggest economy failed to grow in final quarter of 2009, statistics show.
Last Modified: 12 Feb 2010 11:10 GMT
Severe winter conditions may have depressed economic growth in Germany [AFP]

Germany's economy failed to grow in the final quarter of 2009, marking a pause in the country's recovery from last year's financial crisis.

The government's federal statistics office said on Friday that German GDP was flat in the fourth quarter of 2009, following growth in the two previous quaters.

It said exports were the "only positive contribution" to the economy, while imports, consumer spending, and capital investment all fell.

The news comes as governments in the eurozone struggle to sort out Greece's debt difficulties and contain financial market fears that have driven the currency lower.

'Bumpy recovery'

But analysts remained positive over Germany's economy.

"The eurozone growth engine has taken a break in the fourth quarter but it should return soon," Carsten Brzeski, ING bank economist, told the Reuters news agency said.

"Today's numbers, however, were a good reminder that recoveries cannot only be bumpy but also capricious."

Germany went into recession in 2008 as demand for its exports dried up amid the global economic crisis.

After shrinking for four straight quarters, including a 3.5 per cent slump in the first quarter of 2009, the country technically emerged from recession with growth in the second quarter of 2009.

That, in part, helped the 16-nation eurozone to improve economically.

The Federal Statistical Office will release more detailed data for the fourth quarter at the end of February.

Jean-Claude Trichet, the European Central Bank president, has been warning for some time that the recovery in Europe will be "bumpy" and at times "chaotic".

Severe winter weather at the turn of the year may have also affected economic growth. Economists say that could hit GDP in the first quarter but that much of such immediate losses are usually made up in the ensuing months.

Rainer Bruederle, the German economy minister, has said growth in the first quarter of 2010 could be near zero.

Source:
Agencies
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