EU Economy
German growth accelerated in Q4 2014; French GDP growth fell
By Michael Hennigan, Finfacts founder and editor
Feb 13, 2015 - 7:09 AM

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German economic output growth accelerated in Q4 2014 but French GDP growth just managed to stay above the stagnation level. The German economy gained momentum towards the end of 2014, according to Destatis, the federal statistics office. In the fourth quarter of 2014, the gross domestic product (GDP) rose 0.7% on the third quarter of 2014 after adjustment for price, seasonal and calendar variations.

Following a strong start into the year (+0.8% in the first quarter) and the subsequent period of weakness last summer (–0.1% in the second, and +0.1% in the third quarter), the economic situation stabilised towards the end of the year. Destatis also reports that this has led to a +1.6% increase (also when calendar-adjusted) for the whole year of 2014, which is slightly higher than the provisional result released in January.

In a quarter-on-quarter comparison (adjusted for price, seasonal and calendar variations), positive contributions were made mainly by domestic demand. Especially households markedly increased their final consumption expenditure again. A positive development was also observed for fixed capital formation which was up on the third quarter of 2014 in machinery and equipment and especially in construction. Also, exports of goods and services increased considerably again, according to provisional calculations; however, imports rose a similar extent.

In a year-on-year comparison, economic growth accelerated slightly since summer. The price-adjusted GDP in the fourth quarter of 2014 rose by +1.6%, following increases of +1.2% in the third quarter of 2014 and of +1.0% in the second quarter of 2014.

The statistical carry-over effect of 2014 is +0.5%. This is the rate of GDP change which would be obtained for 2015 if the seasonally and calendar-adjusted GDP remained at the level of the fourth quarter of 2014 for the entire year.

The economic performance in the fourth quarter of 2014 was achieved by 43.0m persons in employment, which was an increase of 412,000, or 1.0%, on a year earlier.

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According to France's INSEE (Institut National de la Statistique et des Études Économiques), in Q4 2014, GDP in volume terms increased by 0.1%. Over the year, GDP rose by 0.4% as in 2013.

Household consumption expenditure increased slightly by the end of the year (+0.2% after +0.3% in Q3 2014). Conversely, total gross fixed capital formation (GFCF) fell  (–0.5% after –0.6%). Thus, final domestic demand (excluding inventory changes) rose slightly and contributed for +0.1 points to GDP after +0.2 points in Q3. Exports accelerated markedly in Q4 (+2.3% after +0.7%), while imports kept on increasing (+1.7% after +1.3%). Ultimately, foreign trade balance contributed positively to activity: +0.1 points after –0.2 points. Conversely, changes in inventories contributed for –0.2 points, after +0.3 points the previous quarter.

GDP rose by 0.4% in 2014 — at the same level as 2003.


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