Pace of German economic recovery slowing -Buba

FRANKFURT Jan 18 (Reuters) - The pace of Germany's economic recovery is slowing as consumer spending on cars and retail purchases tails off, the Bundesbank reported on Monday. While Europe's biggest economy was still growing in the fourth quarter, helped by foreign demand, its dynamism was being held back by slumping domestic demand, the central bank said.

The Bundesbank's view that growth could have continued in the fourth quarter contrasts with an assessment by the Federal Statistics Office last week that economic activity probably stagnated in the final months of last year, after the economy contracted by a record 5 percent for the year as a whole. [ID:nLDE60C0IL]

"The lack of a further rise in new orders, the decline in imports and the interruption in the improvement of medium-term business expectations suggests that industry will not fully offset the loss of demand in the near future from the expiry of the car scrapping scheme," the Bundesbank said.

"However, in view of further improving export expectations and increased orders in industrial sectors not directly linked to the automobile industry, the recovery process appears intact," it added.

Germany's 5 billion euro ($7.2 billion) car scapping scheme, which offered 2,500 euros toward the purchase of a new car if owners scrapped their old one, helped boost car sales last year by around 1 million units by the time funds for the scheme ran out at the start of September. [ID:nLDE6040M9]