German GDP in line with expectations in Q4 2016, lower on year

The German economy continued its moderate growth at the end of 2016. As the Federal Statistical Office (Destatis) already reported in its first release of 14 February 2017, the gross domestic product (GDP) increased 0.4% - upon price, seasonal and calendar adjustment - in the fourth quarter of 2016 compared with the previous quarter. The economic situation in Germany in 2016 thus was characterised by solid and steady growth (+0.7% in the first quarter, +0.5% in the second quarter and +0.1% in the third quarter). For the whole year of 2016, this was an increase of 1.9% (calendar-adjusted: +1.8%). The provisional annual GDP result released in January has thus been confirmed.

The quarter-on-quarter comparison (upon adjustment for price, seasonal and calendar variations) shows that positive contributions came mainly from domestic demand. The final consumption expenditure of general government rose by 0.8% and household final consumption expenditure increased by 0.3% on the third quarter of 2016. A largely positive development was also observed for capital formation. Especially gross fixed capital formation in construction was up (+1.6%) on the previous quarter. Gross fixed capital formation in machinery and equipment fell slightly (-0.1%) on the previous quarter. On the whole, domestic uses rose by 0.9% (upon price, seasonal and calendar adjustment) compared with the third quarter of 2016.