The German economy shrank in the fourth quarter of 2012: compared with the previous quarter with the gross domestic product ( GDP) declining –0.6% after seasonal adjustments. The German economy grew in the first three quarters of 2012 (by +0.5%, 0.3% and 0.2%). Destatis, the federal statistic office, also  reported an increase of +0.7% for the whole of 2012. French GDP also shrank in the final quarter, –0.3%, after +0.1% rise  the previous quarter. Over the year, French GDP growth was zero in 2012, after +1.7% in 2011.

Compared with a year earlier, German GDP in the fourth quarter of 2012 was 0.1% higher than in the fourth quarter of 2011.

In a quarter-on-quarter comparison (adjusted for price, seasonal and calendar variations), indicators from the domestic market were mixed according to provisional calculations: household and government final consumption expenditure went up slightly. In contrast, gross fixed capital formation in construction decreased a bit and gross fixed capital formation in machinery and equipment was down markedly on the third quarter of 2012. The decline of the GDP at the end of 2012 was mainly due to the comparably weak German foreign trade: in the final quarter of 2012, exports of goods went down much more than imports of goods.

The economic performance in the fourth quarter of 2012 was achieved by 41.9 million persons in employment, which was an increase of 320,000 persons or 0.8% on a year earlier. 

INSEE, France's national statistics office, said households’ consumption expenditure slightly increased at the end of the year (+0.2% after +0.3%). Their growth was offset by a fall (–1.0% after –0.5%) in fixed capital investment. Total domestic demand (excluding inventory changes) was neutral on GDP evolution (after +0.1 point). Exports in Q4 (–0.6% after +0.7%) and imports‘ fell (–0.8% after –0.5%). The foreign trade balance contributed again positively to GDP growth in Q4 : +0.1 point after +0.3 point the previous quarter. Changes in inventories continued to weigh down on GDP growth in Q4: –0.4 point, after –0.3 point the previous quarter.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.