Germany's export recovery prevented the economy from contracting in the fourth quarter (Q4) of 2009, the federal statistics office, Destatis, said Wednesday. The budget deficit for 2009 was reported to have been 3.3%  of GDP (gross domestic product)- - just above the Euro Growth and Stability Pact limit of 3%.

Destatis had reported on Feb 12th that gross domestic product (GDP) in the fourth quarter of 2009 stagnated at the previous quarter’s level (+0.0%).

Exports rose 3.0% on the previous quarter and imports decreased (–1.8%). The resulting balance of exports and imports contributed 2.0 percentage points to the economic development. However, that positive contribution to growth was entirely offset by the negative development of domestic factors, which were down a total 2.1%. Destatis said both final consumption expenditure and gross fixed capital formation had a downward effect on growth. Government final consumption expenditure decreased by 0.6%, final consumption expenditure dipped 1.0%. Gross fixed capital formation in construction was down by 0.5% and in machinery and equipment by even 1.5%. Inventories were reduced in the fourth quarter of 2009 (contribution to growth: –1.2 percentage points), following a considerable increase in inventories in the third quarter of 2009 (contribution to growth: +1.5 percentage points).

Destatis also reported today that net borrowing of general government amounted to €79.3 billion in 2009. Measured as a percentage of GDP at current prices (€2,407.2 billion), a general government ratio of –3.3% was calculated for 2009. These data are based on the definitions of the European System of Accounts (ESA) 1995.

Net borrowing is calculated as the difference between revenue (€1,066.0 billion) and expenditure (€1,145.3 billion) of general government. When broken down by government levels, the central government accounted for €39.6 billion of net borrowing, the state governments for €20.2 billion, local government for €7.5 billion and social security for €12.1 billion.

Destatis said based on the definitions that are relevant to the European procedure in case of an excessive deficit of general government, net borrowing of general government amounted to €79.1 billion. The slightly lower deficit was due to the fact that interest flows under swap contracts and forward rate agreements were taken into account. When calculated according to these definitions, the deficit ratio was also 3.3%.

Germany breached the budget-deficit limits set by the Maastricht Treaty rules at 3% of GDP, for the first time since 2005 but in the year of the worst recession since 1945.

Net lending/net borrowing of general government in percent of gross domestic product at current prices