Germany’s economy hit by contraction

Preliminary data from the Federal Statistics Office released yesterday also showed that growth compared to the same quarter a year earlier eased to 1.5 per cent from an upwardly revised 2.6 per cent in the previous quarter.

The Office said investments, particularly in construction, boosted the economy in the fourth quarter, while trade and private consumption were negative factors.

A Reuters poll of economists had forecast a 0.3 per cent contraction on the quarter and 1.9 per cent growth on the year. Quarterly growth had initially been reported at 0.5 per cent for the third quarter, while annual growth had earlier stood at 2.5 per cent.

Andreas Scheuerle, analyst at Dekabank, said: “The German economy is escaping with a black eye.”