- The federal statistics office Destatis
Europe's largest economy slowed down sharply in 2012, proving that it was hit by the Eurozone sovereign debt crisis and weak global growth, which damped exports and company investment. According to the report by the Federal Statistics Office, German economy expanded by 0.7% in 2012, sharply below the 3% growth seen in 2011. The report also showed that the gross domestic product shrank by 0.5% in the last three months of 2012, the worst quarterly performance since Germany fell into a recession during the global financial crisis in 2008. Last month, German government lowered its growth forecast for this year to 0.4%, saying there are risks of falling into recession.
"In 2012, the German economy proved to be resistant in a difficult economic environment and withstood the European recession," the federal statistics office Destatis said.
"There shouldn't be a technical recession," said Christian Ott, an economist at Natixis Securities in Frankfurt. "We expect some level of economic growth in the first quarter as domestic demand compensates somewhat for weak foreign trade. At the same time, the recovery in global trade will be very slow. If it falls away completely, then we won't manage to avoid recession."
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