German growth down on 2006

The German economy showed growth last year with GDP rising 2.5 per cent despite weaker consumption.

But the figure from the German federal statistics office is down on the 2006 increase of 2.9 per cent, and the expansion slowed sharply in the final quarter of 2007.

Growth dropped to around a quarter of a percentage point in the last three months of the year from 0.7 per cent in the July-September period.

A value-added tax rise and household anxiety about waning purchasing power hit consumer spending in 2007.

Economists are looking for a rise in private spending to support the economy this year when the impetus from exports is expected to ease.