Germany enjoyed its fastest economic expansion in two decades last year as booming exports spurred hiring and consumer spending.
Gross Domestic Product (GDP) jumped 3.6 per cent, the most since data for a reunified Germany began in 1992, after slumping 4.7 per cent in 2009, the Federal Statistics Office in Wiesbaden said today. The figure was in line with the median forecast in a Bloomberg News survey of 28 economists. GDP probably rose 0.5 per cent in the fourth quarter from the third, the statistics office said. The official fourth-quarter report is due on February 15.
The Bundesbank expects Europe’s largest economy to expand 2 per cent this year and 1.5 per cent in 2012 as the sovereign debt crisis damps demand in the euro area, its main export market. Germany’s Continental, the second-biggest tyre maker in Europe, yesterday reported sales and earnings that beat its 2010 goals.
“The growth momentum continued into the first quarter and current forecasts might turn out to be too pessimistic,” said Klaus Baader, co-chief euro-area economist at Societe Generale in London. “The German economy will likely have returned to its pre-crisis level in the third quarter.”
The euro traded at $1.3032 at 10.13 am in Frankfurt, up from $1.3005 before the GDP report.
Domestic demand was the main contributor to GDP growth, adding 2.5 percentage points, the statistics office said. Private consumption rose 0.5 per cent, state spending increased 2.2 per cent and capital investment jumped 5.5 per cent.
Net trade contributed 1.1 percentage points to growth, with exports surging 14.2 per cent and imports up 13 per cent.