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Confirming a preliminary reading, the Federal Statistics Office
said on Tuesday that state spending, which rose by 1.0 percent
on the previous quarter, contributed 0.2 percentage points to
gross domestic product in the October-December period.
Investment increased by 2.4 percent on the quarter, contributing
0.4 percentage points to growth. Trade was a drag, subtracting
0.5 points from growth.
Germany is spending billions of euros on housing, integrating
and finding work for a record number of refugees fleeing
conflicts and poverty in the Middle East and elsewhere. At the
same time, record-high employment, rising wages, low inflation,
and cheaper gasoline have boosted private spending.
That is helping to compensate for a drop in exports,
traditionally the driver of Europe's biggest economy.
"The fourth quarter tells the same story as previous quarters.
We have weaker exports mainly because of problems in emerging
markets but also because the United States imported less from
Germany," said DekaBank analyst Andreas Scheuerle.
"The story will remain the same for the rest of the year, with
weaker foreign trade and stronger domestic demand because of
higher state spending and consumption."
Recent data has shown factory orders, exports and imports
falling while the mood among German investors has worsened.
The Ifo institute is due to publish its closely-watched business
morale index for February later on Tuesday. It is expected to
fall after hitting its lowest level in almost a year in January.
(Reporting by Joseph Nasr; Editing by Michelle Martin and
Catherine Evans)
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