The German economy grew strongly last year, despite the European debt crisis. Gross domestic product jumped by 3 percent, while the national deficit sank, the Federal Statistical Office reported on Wednesday. But experts warn that, given the slight contraction in the final quarter of last year, Germany could enter a recession in 2012.
It’s good news for financial markets. Despite the European debt crisis, new figures released on Wednesday show solid growth for Germany in 2011. The price-adjusted gross domestic product (GDP) increased by 3 percent year-on-year, the German Federal Statistical Office reported.
For the second year in a row, the German economy showed steady recovery from the economic crisis in 2009, when the country had its worst recession since World War II and GDP shrunk by 5.1 percent. But the latest figures show Germany’s GDP exceeding its pre-crisis level for the second year in a row, Destatis reported. Consumers happy to part with their cash were the main driver of the growth last year, with private consumer spending up by 1.6 percent — an increase higher than any seen in the last five years.
But by year’s end, the worldwide economic downturn still negatively impacted the German economy. In the final quarter of 2011, GDP declined by approximately 0.25 percent compared to the previous quarter, Destatis estimated.