Germany's economic recovery unexpectedly stalled in the fourth quarter of 2009 as waning consumption and investment offset export growth.
Gross domestic product, adjusted for seasonal effects, was unchanged from the third quarter, when it rose 0.7 per cent, the Federal Statistics Office said today. The median estimate in a Bloomberg News survey of 33 economists was for growth of 0.2 per cent. GDP dropped 5 per cent in 2009.
Germany's economy emerged from its worst recession since World War II in the second quarter of last year and helped drive a recovery in the 16-nation euro region. While a global rebound has fuelled demand for German exports, rising unemployment and expiring government stimulus measures are damping domestic spending.
"The recovery will remain bumpy and we're now in one of the potholes," said Andreas Scheuerle, an economist at Dekabank in Frankfurt. "While private consumption will remain weak, the overall trend is tilted to the upside."
The statistics office said exports made a positive contribution to fourth-quarter GDP, while consumption and investment declined. From a year earlier, the economy shrank 2.4 per cent when adjusted for the number of working days. The Bundesbank forecasts growth of 1.6 per cent this year.
The euro region's economic recovery slowed in the fourth quarter, with growth of 0.3 per cent after 0.4 per cent in the third, according to a Bloomberg survey of economists. That report is due from the European Union's statistics office in Luxembourg at 11 am.
Some German companies are struggling with sluggish domestic demand as unemployment rises. Hugo Boss AG, Germany's largest clothing maker, said on February 3rd that full-year profit fell 7 per cent on costs for closing
unprofitable stores.
Expansion of Asian markets may sustain German growth this year. The International Monetary Fund last month forecast 2010 economic growth of 9.7 per cent and 7.8 per cent in China and India respectively, compared with 1.6 per cent expansion in the euro area and 2.4 per cent in the US. The IMF sees the global economy expanding 3.9 per cent.
German exports unexpectedly jumped in December, notching their fourth successive monthly gain. The BGA wholesale and export federation on January 12th predicted exports will rise as much as 10 per cent this year, driven by demand from China.
Bloomberg