Germany's Economy Stagnated in 4Q as Consumption Lost Steam -- Update
By Maria Martinez
Germany's economy stalled in the fourth quarter as government
and household consumption slowed, the federal statistics agency
Destatis said Friday.
Gross domestic product remained flat at 0.0% compared with the
previous quarter, according to Destatis. This is below economists'
expectations of a 0.1% expansion according to a survey by The Wall
The statistics agency also revised data for the third quarter of
2019, saying that Germany's GDP increased 0.2% in the period,
compared with a first estimate of a 0.1% rise.
While the economy got a boost from consumption in the third
quarter, both government and household consumption slowed markedly
in the fourth quarter, Destatis said.
"With German gross domestic product stalling in the last quarter
of 2019, the economy began this year with even less momentum than
most had expected," said Andrew Kenningham, chief Europe economist
for Capital Economics.
Ahead of the release, weak data for manufacturing orders and
industrial production in December had raised fears that the economy
had stagnated or even contracted in the fourth quarter.
Gross fixed capital formation in machinery and equipment was
down considerably compared to the third quarter, while fixed
capital formation in construction and other fixed assets continued
"The development of foreign trade slowed down the economic
activity in the fourth quarter," Destatis said.
According to provisional calculations, adjusted exports were
slightly down on the third quarter, while imports of goods and
GDP grew 0.4% on year in the fourth quarter on a calendar and
price-adjusted basis, Destatis said, in line with a Wall Street
Journal poll of economists.
In the fourth quarter, Germany employed 45.5 million people, an
increase of 0.7% compared with the same period in 2018.
Forward-looking surveys give mixed signals about the German
economy. While some business surveys rose slightly in January,
others such as the Ifo business climate index declined, Mr.
These surveys were collected before the coronavirus outbreak,
which could cut a little from GDP in the first quarter given
Germany's exposure to global supply chains and demand from China,
Mr. Kenningham said.
The latest soft indicators and industrial data for December do
not bode well for the short-term outlook, said Carsten Brzeski,
chief economist for ING Germany.
"Stagnation, with a risk of a technical recession, is currently
the only option for the German economy," Mr. Brzeski said.
Write to Maria Martinez at email@example.com
(END) Dow Jones Newswires
February 14, 2020 03:56 ET (08:56 GMT)
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