German economy stalls

Date: Friday 12 Feb 2010

The German economy failed to grow in the fourth quarter of 2009 following two consecutive quarters of growth.

Germany’s gross domestic product was unchanged quarter-on-quarter, preliminary data from the Federal Statistics Office showed. Analysts expected a 0.2% to 0.3% rise.

Europe’s largest economy expanded by 0.7% in the third quarter and 0.4% in the three month period to June.

‘On the one hand, today’s data is a little disappointing though it does show a continued improvement in domestic demand,’ said Azad Zangana, European economist at Schroders.

‘German households are still concerned over job prospects, fully aware that the smaller than expected rise in unemployment so far has been greatly influenced by the Government’s short-time working subsidies (Kurzarbeit).’

‘Continued fiscal support will slowly improve confidence and growth, but the battle of hearts, minds and wallets has yet to be won,’ he added.

Elsewhere, France's gross domestic product grew 0.6% in the same quarter. Third-quarter GDP growth was revised down to 0.2% from 0.3%.

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