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German growth slows sharply in 2019

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Christian Fernsby ▼ | January 15, 2020
The German economy grew by 0.6% in 2019, the weakest expansion rate since 2013 and a marked cooling from the previous year.
German workers
European economy   German workers
The preliminary estimate, released today by the Federal Statistics Office followed growth in gross domestic product (GDP) of 1.5% in 2018.

Topics: German

"This means that the German economy grew the tenth year in a row. This is the longest growth period since German reunification," statistics official Albert Braakmann said, adding that stronger private consumption, higher state spending and booming construction supported growth in 2019.

Deka Bank analyst Andreas Scheuerle said the German economy had ended an unusually weak year marked by "bad luck and misery", pointing to tariff disputes and Brexit uncertainty.

"Without the domestic demand this means private consumption, state spending and construction the German economy would have entered a recession," Scheuerle added.

The office said the budget surplus of the public sector, including federal states, municipalities and social security systems, fell to 49.8 billion euros ($55.4 billion) or 1.5% of GDP after 62.4 billion euros or 1.9% in the previous year.

Exports edged up by 0.9% last year after a 2.1% increase in 2018 while imports rose by 1.9% following a 3.6% jump, the office added. This suggests that net trade had a negative impact on overall economic growth last year.

Germany's export dependent manufacturers are contending with sluggish foreign demand in light of a slowing world economy and uncertainty linked to tariff disputes and Britain's decision to leave the European Union.

The automobile sector is also struggling to adjust to stricter emissions regulation and a shift to electric vehicles.

Production in manufacturing, which makes up roughly a quarter of overall economic output, fell by 3.6%, the data showed. "This decrease was mainly caused by weak production in the automobile industry," the statistics office said.

Year-on-year from January to November, output in the car industry fell by 11.4%, statistics official Stefan Hauf added.


 

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