The German economy has shrunk by 0.5%, and is not the bastion of economic growth in the Eurozone, which has entered its fourth year in the debt crisis. It along with the Netherlands, and Nordic countries are the strongest members in a "still recessionary eurozone sea," said Carsten Brzeski, an economist at ING.
"Germany has been a pillar of strength in the eurozone debt crisis but its economy slowed in the second half of last year. German exports and imports slid in November and industry orders fell more than expected, compounding expectations that the eurozone debt crisis is hitting the German economy with full force." (Daily Telegraph).
For the full year, export growth slowed to 4.1% from 7.8% in 2011, while equipment investment fell by 4.4%, the Statistics Office said. "In the previous two years, GDP growth had been much larger but that was due to a catching-up process following the worldwide economic crisis of 2009," the Office said in a statement.
Most economists expect Germany to bounce back from the weak fourth quarter in the months ahead, but 2013 is still shaping up as another year of meagre growth.
The government is due to publish an estimate for 2013 growth on Wednesday. Handelsblatt newspaper reported on Tuesday that it would halve its forecast to 0.5% from 1%.Andreas Scheuerle at Dekabank called the 2012 figure "disappointing".
"But if you take the tough environment in the euro zone and weakness in growth markets into account, one can be quite pleased after all."