Germany avoids recession after 'slight' growth

Business Tuesday 15/January/2019 13:59 PM

By: Times News Service

Frankfurt: The German economy, Europe's largest, likely recovered slightly in the fourth quarter of 2018, avoiding a technical recession after negative growth over the three previous months, national statistics body Destatis said on Tuesday.

"There were signs of a slight rebound at the end of the year," Destatis expert Albert Braakmann told reporters, without giving a figure.

The office will release its fourth quarter growth estimate on February 14.

German output shrank by 0.2 per cent from July to September, dragged down by problems in the crucial car sector and low water levels in the Rhine that hampered deliveries in key industries.

Recent industrial data suggested the aftershocks of both stretched into the final months of 2018, fuelling fears that Europe's powerhouse economy could shrink for a second consecutive quarter — the definition of a technical recession.

Uncertainty about Brexit and US-China trade tensions have also rattled nerves in export-reliant Germany.

But strong domestic demand appears to have shored up the economy in the final months of last year, the economy ministry said in a statement.

"Economic output is likely to have rebounded in the fourth quarter after the decline in the third," it said.

Destatis separately announced that the Germany economy grew 1.5 per cent in 2018 overall, down from 2.2 per cent the year before.

"The German economy had its weakest performance in five years but seems to have avoided a technical recession," said ING Diba bank economist Carsten Brzeski.

"It currently looks as if the German economy could get away with one black eye but these days, economic strength in Germany doesn't come effortlessly," he added.