No further growth of German economy at year-end
by Hans Diederichs
The gross domestic product (GDP) did not continue to rise in the fourth quarter of 2019 compared with the third quarter of 2019 after adjustment for price, seasonal and calendar variations. After a dynamic start in the first quarter (+0.5%) and a decline in the second quarter (-0.2%) there had been a slight recovery in the third quarter of the year (+0.2%). According to the latest calculations based on new statistical information, that recovery was 0.1 percentage points stronger than had been communicated in November 2019. The Federal Statistical Office (Destatis) also reports that the resulting GDP growth was 0.6% for the year 2019 (both price and seasonally adjusted).
Household and government final consumption expenditure slowed down
Compared with the previous quarter, there were mixed signals regarding domestic demand (after price, seasonal and calendar adjustment). After a very strong third quarter, the final consumption expenditure of both households and government slowed down markedly. Trends diverged for fixed capital formation. While gross fixed capital formation in machinery and equipment was down considerably compared to the third quarter, fixed capital formation in construction and other fixed assets continued to increase.
Exports slightly down, imports up
The development of foreign trade slowed down the economic activity in the fourth quarter. According to provisional calculations, exports were slightly down on the third quarter after price, seasonal and calendar adjustment, while imports of goods and services increased.
Year-on-year comparison showing slower economic growth at year-end
In a year-on-year comparison, economic growth decelerated towards the end of the year. In the fourth quarter of 2019, the price adjusted GDP rose by 0.3% on the fourth quarter of 2018 (calendar-adjusted: +0.4%). A higher year-on-year increase of 1.1% had been recorded in the third quarter of 2019 (calendar-adjusted: +0.6%).
Statistical carry-over effect of +0.1% at the end of 2019
According to the current state of calculation, there was a small statistical carry-over effect of +0.1% at the end of 2019. The statistical carry-over effect is the rate of GDP change which would be obtained for 2020 if the price, seasonally and calendar adjusted GDP in all quarters of 2019 just remained unchanged compared with the fourth quarter of 2019.
The economic performance in the fourth quarter of 2019 was achieved by 45.5 million persons in employment, which was an increase of roughly 300,000, or 0.7%, on a year earlier
Source: Destatis Graphic: Fotolia