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Germany's growth up in fourth quarter of last year

Xinhua, February 13, 2015 Adjust font size:

The German economy increased by 0.7 percent in the last quarter of 2014, official data showed on Friday, signaling that Europe's biggest economy has overcome the weak phase in the summer months and returned to an accelerating growth trajectory.

"Following a dynamic start into the year and the subsequent period of weakness last summer, the economic situation stabilized towards the end of the year," said German federal statistical office Destatis in a statement.

It said domestic demands were the main contributor to the growth as household consumption increased markedly in the quarter and investment in equipment and construction also improved.

Over the whole year of 2014, the German gross domestic product (GDP) increased by 1.6 percent, Destatis said.

The German economy narrowly avoided a recession during the summer months of last year due to external uncertainties, including the Ukraine crisis and weak growth of the euro zone.

Following a robust growth of 0.8 percent at the start of 2014 thanks to a mild winter, the economy shrank by 0.1 percent in the second quarter and merely rebounded by 0.1 percent in the third quarter.

Analysts said falling oil prices and a weak euro stimulated German economy at the end of 2014 and would continue to play a supporting role in economic growth this year.

In its latest monthly report, the German Federal Economy Ministry said a downturn phase for the German economy was over, industrial orders and output both increased and companies confidence improved again.

The ministry warned, however, that a weak euro and extremely low prices of oil might just be short-term stimulus. The external environment for Germany remained difficult as the Ukrainian crisis was yet to be resolved and Greece debt negotiations posed uncertainties to euro zone stability.

The Association of German Chambers of Commerce and Industry (DIHK) said that the German economy also faced increasing pressure from inside the country.

According to its survey on 27,000 companies, rising labor cost and shortage of skilled workers were among the most serious concerns of German enterprises. Endi