German economy’s Q4 output stagnates

Berlin: Europe´s largest economy Germany marked time in the fourth quarter of 2019 as its export-oriented industry´s woes continued to weigh on growth, official data showed Friday.

Gross domestic product (GDP) was flat quarter-on-quarter in October-December, federal statistics authority Destatis said, disappointing the agency´s own expectations and those of analysts surveyed by Factset.

The statisticians also revised their third quarter growth figures, saying that GDP had added 0.2 rather than 0.1 percent.

Over the whole year, the annual growth rate of 0.6 percent was Germany´s worst since 2013. The economy "remains in a weak phase," the economy ministry in Berlin said, highlighting "very weak" industrial production and incoming orders for manufacturing firms towards the end of the year.

After a surge in 2017-18, Germany´s export-oriented economy has been sapped since late 2018 by trade conflicts and other sources of uncertainty, including Brexit and slower growth in emerging economies. For some analysts, that meant simply avoiding a second quarter of shrinkage in 2019 after the contraction in April-June was worth celebrating.

"Overall economic stagnation in the fourth quarter is already a small success" given that industrial output shrank strongly, said Dr. Fritzi Koehler-Geib, chief economist at KfW banking group.

Industry continues to suffer, with production shrinking sharply in December, Destatis data showed. Meanwhile, "private and state consumer spending lost significant momentum after a strong third quarter," the statisticians added.

Supported by unemployment close to historic lows and gradually rising public spending, consumption had been an important buttress to economic activity in Germany compensating for ailing industry. Looking ahead into 2020, the rebound many observers were hoping for in the first half of the year will likely be pushed back by the effects of the novel coronavirus COVID-19.