German economy shrinks 0.2% in fourth quarter

The German economy, Europe's biggest, contracted 0.2 percent in the fourth quarter of last year as exports were hit by the eurozone debt crisis, according to official data. "Foreign trade had a negative effect on the German economy in the final quarter of 2011. But consumer spending also declined slightly," the national statistics office Destatis said in a statement, adding that over the whole of 2011, the economy expanded 3.0 percent. "The German economy suffered a small setback at the end of 2011, with gross domestic product (GDP) declining by 0.2 percent in price-, calendar- and seasonally-adjusted terms in the fourth quarter," the statement said. According to preliminary data, the only positives came from investment on a quarter-on-quarter basis in the period from October to December, with construction investment, in particular, much higher than in the third, Destatis said. Last month, the statistics authority had estimated that GDP likely contracted by around a quarter of percentage point in the fourth quarter as the debt crisis slammed the brakes on growth. The full-year growth figure of 3.0 percent represented a slowdown from the record 3.7 percent recorded in 2010.