Declining exports stunted German economic activity in the fourth quarter, new data has revealed, showing the country’s economy was stagnating even before the coronavirus outbreak.
Growth in Europe’s largest economy was confirmed at 0 per cent for the final three months of the year, according to the Federal Statistics Office.
Exports fell 0.2 per cent quarter on quarter in the last three months of the year, meaning that net trade took off 0.6 percentage points from GDP product growth.
German manufacturers have been hit by a slowing global economy and increased business uncertainty amid tariff disputes and Brexit.
The outlook has been further clouded by risk linked to the coronavirus epidemic, Ifo president Clemens Fuest said. He added that the Ifo index for export expectations fell in February, with car companies among the most pessimistic.
Nevertheless, figures released yesterday by Ifo revealed a surprise increase among German business leaders this month.
Gross investment, which includes construction, rose 2.9 per cent in the fourth quarter, adding 0.6 percentage points to growth, the statistics office said.
State consumption added 0.1 percentage points to growth while private consumption made no contribution.
“This dour data fails to reflect any possible impact from the coronavirus, which could lead to a sharp contraction if fears over an Italian-led outbreak in Europe comes to fruition,” said Joshua Mahony, senior market analyst at IG.
Overall, the German economy grew 0.6 per cent last year, the weakest expansion rate since the eurozone debt crisis in 2013, the data showed.
This year the government expects growth of 1.1 per cent, helped largely by a higher number of working days in a leap year.