| Strong domestic demand drives robust German growth performance in 2011 |
| 11.01.12 11:36 | |
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In line with expectations, annual 2011 German GDP growth was 3.0%, according to a first estimate released today by the German Federal Statistical Office, slightly lower than in 2010 (3.6%). However, final domestic demand strengthened further in 2011 and contributed 2.2 percentage points (ppts) to GDP growth, compared with 1.7ppts in 2010. Net exports contributed 0.8ppts to growth, less than in 2010 (1.5ppts). Inventories declined slightly subtracting 0.1ppts from growth, in contrast to the previous year where a rebuilding of stocks gave a 0.6ppts boost to GDP growth. Private consumption grew 1.5%, the strongest showing in years, and gross fixed capital investment grew 6.5%, reflecting a still very strong performance of machinery and equipment investment (8.3%) and solid construction investment (5.4%). Growth in government consumption slowed to 1.2%, but still was positive despite a significant improvement in the general government balance to -1.0% of GDP (Maastricht definition), from -4.3% in 2010. The Statistical Office also said, according to Bloomberg, that the German economy shrank "roughly" 0.25% q/q in Q4, virtually identical to our forecast (-0.23%). We continue to expect a return to positive GDP growth in early 2012, although at very modest levels (0.1% in Q1 12) and see annual 2012 German GDP growth at 0.5% if the euro area sovereign debt crisis is contained. In that event, robust domestic demand including private consumption demand may continue to support a rebalancing of the German economy and the risks to our annual 2012 growth forecast would be to the upside. source: BarCap |
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