German GDP stagnates as exports decline
By Sean Farrell
Date: Tuesday 25 Feb 2020
(Sharecast News) - Germany's economic output stagnated in the fourth quarter of 2019 as exports from Europe's largest economy fell.
GDP registered zero growth in the three months to the end of December, the Destatis national statistics office said. The result was in line with a previous estimate and economists' average forecast. Destatis confirmed annual growth at 0.6% for 2020.
Exports fell 0.2% from the third quarter as a 0.4% increase in services exports was more than offset by a decline in goods and services. Germany's export-focused economy has struggled as trade tensions, slowing economic growth and now the coronavirus have affected global growth.
Reflecting the slowdown in output, investment in machinery and equipment dropped 2% in the fourth quarter, a deterioration from the 1.4% decline in the previous three months. Consumer spending was flat, down from a 0.5% increase in the third quarter.
"The slowdown in manufacturing output finally hit home in the second half of last year, stinging investment," Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said. "The German economy is not out of the woods."
Vistesen said surveys indicating a small drop in German output in the first quarter were believable, especially as the figures do not yet show the full impact of the coronavirus outbreak, which casts a shadow over the first half. He stuck to his prediction of an economic recovery from the second or third quarter.
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