German growth accelerates in 2014

The German economy expanded at a three-year-high rate in 2014, accelerating from weak growth in previous two years, official data showed on Thursday.

Germany's gross domestic product (GDP) increased by 1.5 percent last year, following meager growth of 0.4 percent in 2012 and 0.1 percent in 2013, German federal statistical office Destatis said.

It was the fastest growth since 2011 when Europe's biggest economy expanded by 3.6 percent.

"Obviously, the German economy turned out to be strong in a difficult global economic environment, benefiting especially from a strong domestic demand," said Destatis President Roderich Egeler in a statement.

Household consumption rose by 1.1 percent in 2014, while government spending also increased by 1.0 percent. Investment in machinery and equipment was up by 3.7 percent, that in construction grew by 3.4 percent at the same time.

Destatis said German foreign trade only made a "relatively small contribution" as exports increased by 3.7 percent year-on-year while imports rose almost as strongly by 3.3 percent.

The German economy saw a dynamic start early 2014 due to mild winter, but it got hit by uncertainties from abroad including geopolitical tensions in Ukraine and weak eurozone growth during the summer. In the third quarter, it narrowly avoided a recession thanks to strong private consumption.

Destatis didn't release the growth data of the final quarter last year, but said economic situation in Germany stabilized towards the end of 2014 when oil prices fell, business sentiments revived and employment increased.

In 2014, the number of employment reached a record high for the eighth consecutive year and stood at 42.7 million.

German general government, including central and local governments and social security funds, enjoyed a budget surplus in 2014 with a surplus-to-GDP ratio of 0.4 percent. Endit