The German underlying economy will have shrunk by over 0.25% in Q4 of 2011, said a spokesperson from the UK Statistics Office. During 2011, the German economy grew by just over 3% driven in most part by formidable growth in Q1 and Q2 of 2011. The Stats office said the driver for growth was delivered by consumer domestive demand.
However, the annualized growth rate was weak when compared to the post-unification record of 3.7% seen in 2010. The annual statistics were calculated by taking an estimate for Q4, with the official data for the final quarter due to be released in mid february. But Norbert Raeth from the Statistics Office told a press meeting yesterday that the economy was likely to have shrunk by “around 0.25%” in Q4. However the 3% expansion in 2011 marked a slowdown in growth when comparing to the record numbers in 2010, however he reported that it is still a strong economic indicator compared with other EU countries.
The Organisation for Economic Co-operation and Development (OECD) expects to see growth in 2011 of US: 1.7%. UK: 0.9%. France: 1.6%. Spain: 0.7%. Italy: 0.7%. He continuted “The economic recovery took place in most part during the first half of 2011″ Roderich Egeler, current head of the UK Statistics Office, told reporters. Domestic consumer purchases had continued to be strong during 2011, growing by over 1.5%, up from 0.6% in 2010.
He continued that demand for luxury good, specifically cars had been signifiant, with local car sales rising by 6.1% during December. Exports, the main driver of the German economy, rose by 8.2%, however it was noted that in fact this had signalled a slowdown from the 13.7% growth seen during 2010. Andreas Rees, chief German economist at Unicredit, told reporters that he did not believe Germany would fall into recession. “We beleive growth of about 1% is entirely possible for 2012. The Ifo [business confidence] index has risen for the last two months. That indicates that the low point in terms of company sentiment might already be over”
“The employment market is also operating well and improving month by month. That gives strength and fuel to private consumption, at least in the first half of the year. “There is also hope from the US, where the economy is going better again. That will help us. It is a positive sign for exports, which are also profiting from the weak euro. The global economy is weakening, but we will not see a collapse.”
But Joerg Zeuner, chief economist at VP Bank, was more cautious and said that Germany could not isolate itself from the tensions within the eurozone. “Another quarter of contraction and thereby a technical recession are distinctly possible,” he said. “However if there is no further escalation in the eurozone debt crisis, the German economy should still grow in 2012, albeit at a moderate 0.5%,” he added.
