German Q4 Economy Stagnation Confirmed


The German economy stagnated in the fourth quarter of 2018 after a 0.2 percent contraction in the July-September period, which was the first time GDP shrank since 2015.

Positive contributions to the GDP came from domestic demand, in particular government spending (0.3 percentage points), gross fixed capital formation (0.2 percentage points) and household consumption (0.1 percentage points). In contrast, changes in inventories subtracted 0.6 percentage points, while net foreign trade was neutral.

Government spending expanded 1.6 percent, rebounding sharply from a 0.3 percent decline in the third quarter; and household consumption rose 0.2 percent, compared to a 0.3 percent contraction in the September quarter. In addition, fixed investment advanced 0.9 percent (vs 0.4 percent in Q3), boosted by investment in machinery and equipment (0.7 percent vs flat reading), construction (1.3 percent vs 0.7 percent) and other fixed assets (0.5 percent vs 0.2 percent). Exports of goods and services increased 0.7 percent in the three months to December, reversing a 0.9 percent fall in the third quarter; and imports also grew 0.7 percent, compared to a 1.3 percent advance in the preceding quarter.
Year-on-year, the economy expanded a calendar-adjusted 0.6 percent in the fourth quarter, slowing markedly from a 1.1 percent growth the previous three-month period. On an unadjusted basis, the GDP grew by 0.9 percent, weaker than a 1.1 percent advance in the September quarter, amid a more negative contribution from net external demand and despite a faster rise in household consumption (1 percent vs 0.2 percent), governemnt spending (1.8 percent vs 0.5 percent) and gross fixed capital formation (3 percent vs 2.4 percent), namely investment in machinery and equipment (3.5 percent vs 3.4 percent), construction (4 percent vs 2.3 percent) and other products (0.5 percent vs 0.4 percent).

German Q4 Economy Stagnation Confirmed


Destatis | Rida Husna | rida@tradingeconomics.com
2/22/2019 11:00:17 AM