germany
FRANKFURT: The German economy, Europe’s biggest, grew by 0.3% in the fourth quarter, driven primarily by robust domestic demand, the federal statistics office Destatis said on Friday.
Germany’s gross domestic product (GDP) expanded by 0.3% in the period from October to December, the same rate of growth as in the preceding three months, Destatis said in a statement.
“The economic situation in Germany was characterised by solid and continuous growth in 2015,” Destatis said.
Following GDP growth of 0.4% in both the first and second quarters, the economy grew by 0.3% in both the third and fourth quarters. That resulted in expansion of 1.7% across the whole year, the statisticians said, confirming a preliminary estimate released last month.
“Positive impulses came primarily from domestic demand,” Destatis said.
State spending increased sharply and private household was up modestly.
“On top of this, investments also developed positively, with construction investment increasing significantly compared with the third quarter,” the statistics office said.
At the same time, foreign trade had dampening effect on growth due to lower exports, it added.
On another note, the statistics office said higher costs for food, services and rents pushed consumer prices in Germany, Europe’s biggest economy, up by 0.5% in January, official data showed on Friday.
Confirming a preliminary flash estimate published at the end of January, the federal statistics office calculated that Germany’s national inflation yardstick, the consumer price index, rose by 0.5% after edging up 0.3% in December. And using the Harmonised Index of Consumer Prices (HICP) - the barometer used by the European Central Bank - the inflation rate stood at 0.4%, also a tick higher than the 0.2% recorded in December.
The ECB regards annual inflation rates of close to but just under 2% as conducive to healthy economic growth and in recent years has launched a raft of measures to kick-start prices and push area-wide inflation back up nearer that level.
A controversial programme of sovereign bond purchases, known as QE or quantitative easing, was rolled out last year and initially appeared to work. But the economic slowdown in China and depressed oil prices have pushed inflation expectations back down again.
At the ECB’s first policy meeting this year, president Mario Draghi suggested additional monetary easing could be on the cards as early as March if inflation expectations do not pick up soon. - AFP
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