* German GDP grew 3.0 pct in 2011, in line with expectations
* Growth based on foreign trade and domestic demand
* Private consumption up 1.5 pct
WIESBADEN, Germany, Jan 11 Germany showed
first signs of feeling the pain from the euro zone's debt crisis
as the economy shrank in the last three month of 2011, despite
outperforming its peers for main part of the year thanks to
strong domestic demand and exports.
Gross domestic product (GDP) grew 3.0 percent in 2011,
preliminary Federal Statistics Office data showed on Wednesday,
below the previous year's growth rate of 3.7 percent -- the
fastest since reunification -- and in line with a Reuters poll
But GDP contracted by around 0.25 percent in the fourth
quarter of 2011, an official from the Statistics Office added.
"Germany cannot isolate itself so easily from tensions
within the euro zone. In addition the export sector is facing a
difficult period given the fall in global demand," said Joerg
Zeuner, chief economist at VP Bank.
"Another quarter of contraction and thereby a technical
recession are distinctly possible. However if there is no
further escalation in the euro zone debt crisis the German
economy should still grow in 2012, albeit at a moderate 0.5
percent," he added.
Germany's export-driven economy recovered quickly from the
2008/09 financial crisis, but began to feel the pinch late last
year as the debt crisis spread from Greece to its key trading
partners in the euro zone and weighed on the real economy.
Germany earns 28 percent of its GDP by exporting goods to EU
countries and Switzerland, but only 2.5 percent in exports to
China, Berenberg Bank pointed out.
Forward-looking orders data released on Friday also
signalled a slump ahead, with orders falling at the fastest pace
since the height of the financial crisis nearly three years ago
as demand from outside the euro zone plummeted.
Many economists have cut their 2012 growth forecasts. The
Bundesbank expects growth of 0.6 percent this year, less than
the government's official forecast of 1.0 percent, while think
tank IMK has even predicted a mild recession.
DEMAND FOR CARS DRIVES 2011 GROWTH
Roderich Egeler, head of the statistics office, said that
Germany managed to continue its stellar recovery from the
financial crisis last year, particularly due to strong demand at
"The economic recovery took place primarily in the first
half of the year," Egeler, the head of the statistics office,
told a news conference. "2011 saw strong private consumption,"
He added that demand for cars had been specifically strong.
German car sales rose 6.1 percent in December and Germany's
Volkswagen and BMW retained leadership in
their home market in 2011.
Private consumption grew 1.5 percent last year compared with
0.6 percent in 2010. This development was helped by a further
fall in German unemployment.
The country's jobless rate fell in December to the lowest
level since reunification two decades ago, while surveys showed
new orders and jobs growth in the services industries helped its
private sector to expand.
Most analysts expect that Germany will be able to rebound
swiftly from any weakness in the winter months as employment
levels remain at high and paltry interest rates persuade
consumers to spend rather than save.