The German economy managed to expand in the fourth quarter avoiding a double-dip recession, despite the second wave of coronavirus triggered another lockdown at the end of 2020.
Gross domestic product grew 0.1 percent sequentially in the fourth quarter, slower than the 8.5 percent expansion posted in the third quarter, data published by Destatis revealed on Friday. Economists had forecast nil growth.
On a yearly basis, GDP, adjusted for calendar-effects, declined 3.9 percent after falling 4 percent in the third quarter. At the same time, the annual fall in price-adjusted GDP slowed to 2.9 percent from 3.9 percent.
The resulting GDP for the whole year of 2020 was 5 percent lower than in 2019, the biggest fall since the 2008-2009 global financial crisis.
The lockdown has affected household consumption in particular, while exports of goods and gross fixed capital formation in construction supported the economy, data showed.
The economy avoided a contraction in the fourth quarter is of little comfort given that its economy will almost certainly shrink in the first quarter this year, Andrew Kenningham, an economist at Capital Economics, said.
A strong recovery is still likely further ahead, but the slow pace of the vaccination programme means it may be more gradual than anticipated, the economist added.
Elsewhere, data from the Federal Labor Agency showed that the unemployment declined unexpectedly by 41,000 in January after falling 40,000 in December. Economists had forecast an increase of 6,000.
The unemployment rate was stable at 6 percent in January. The rate was expected to remain at December’s initially estimated rate of 6.1 percent.
“All in all, the labor market continued to be in robust shape in January,” Federal Employment Agency CEO Detlef Scheele said.
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