Last German spurt as the economy slows into 2012

GERMAN business confidence rose in November, defying economists’ predictions that the economy was weakening rapidly, the IFO business index revealed yesterday.

The Federal Statistical Office also confirmed that GDP grew at a healthy 0.5 per cent in the third quarter, boosted by strong consumer spending.

However, the economy is set to be hit by falling exports as its neighbours and trading partners economies take turns for the worse.

“We see weaker external demand for the near term and expect firms increasingly to delay investment decisions due to the uncertainty created by the euro area sovereign debt crisis,” said Barclays Capital’s Thomas Harjes. “For the final quarter in 2011, we now project German GDP to shrink by 0.3 per cent.”