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1st LD Writethru: Domestic demand revives German economy

Xinhua, February 24, 2015 Adjust font size:

The German economy regained its momentum in the fourth quarter of last year thanks to strong domestic demand, official data showed on Tuesday.

Europe's biggest economy grew by 0.7 percent in the last three months of 2014, said German federal statistical office Destatis, confirming its earlier estimation.

Positive contributions mainly came from domestic demand, which contributed 0.5 percentage points to the growth of gross domestic product (GDP), according to the Wiesbaden-based institute.

Household consumption rose by 0.8 percent quarter on quarter, government consumption increased by 0.2 percent, meanwhile investment expanded by 1.2 percent.

Foreign trade also powered economic growth. Exports increased by 1.3 percent quarter-on-quarter. Imports, however, also increased by 1 percent. Net exports thus contributed merely 0.2 percentage points to the GDP growth.

"Following a dynamic start into the year and the subsequent period of weakness last summer, the economic situation stabilised towards the end of the year," said Destatis in a statement, adding that German GDP increased by 1.6 percent over the whole year of 2014.

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

Falling oil prices and a weak euro were believed to be stimulus to German economy at the end of 2014 and would continue to play a supporting role in economic growth this year.

German central bank said earlier this month that it might lift its forecast for German economic growth in 2015, citing robust domestic demands supported by stable labour market and falling energy prices, as well as a revival of exports fueled by a weaker euro. Endit