German economy grew by 3.6% in 2010

Thursday, 13 January 2011 00:01 -     - {{hitsCtrl.values.hits}}

BERLIN: The German economy grew by a powerful 3.6 per cent last year, surging ahead at its fastest pace since reunification two decades ago as a rebound in exports was accompanied by strengthening domestic demand, official data showed Wednesday.

The preliminary growth figure for Europe’s biggest economy contrasted with a painful contraction of 4.7 per cent in 2009, which was by far its worst showing since World War II.

Last year’s growth rate was the strongest since reunification in 1990, beating the previous best of 3.4 per cent from 2006.

A key trigger for the strong recovery was powerful growth in exports into a recovering world economy. Germany is the world’s second-biggest exporter after China.

Exports grew by 14.2 per cent last year, reversing a decline of 14.3 per cent in 2009, the Federal Statistical Office said.

However, ``what was striking in 2010 was the fact that economic growth was not only based on foreign trade, but also on domestic demand,’’ the office said in a statement.

Investment in machinery and equipment was up 9.4 per cent, following a huge decline of 22.6 per cent the previous year. Household spending was up 0.5 per cent, following a 0.2 per cent decline in 2009.

Imports rose 13 per cent, more than making up a 9.4 per cent drop the previous year.  Germany’s swift recovery has made it a standout in the 17-nation eurozone, where smaller economies such as Ireland, Greece and Portugal have been struggling with huge debts.