Contraction of the German economy in the Q4

Source: Bloomberg
Germany`s economic slowdown in the Q4 was caused by a decrease in exports and investment as the Euro bloc`s demand was impaired by sovereign debt crisis. Exports decreased 2% in comparison to the Q3; meanwhile, investment contracted 0.7%. According to reports released in Feb. 14 2013, GDP fell 0.6%, however, economy confronted a 0.4% increase after adjustment of the working days. Household consumption gained 0.1% in the Q4 while public spending rose 0.4% sequentially.

"We should return to growth in the first quarter and investment should resume its upward trend in the course of this year," said Lothar Hessler, an economist at HSBC Trinkaus & Burkhardt AG in Dusseldorf, who expects the economy to expand 0.6 percent in 2013. "The risks to this outlook are a possible re-eruption of the European crisis after elections in Italy, or continued uncertainty about the U.S. fiscal cliff."

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