Germany narrowly avoids slipping into recession, figures show

Feb. 14 (UPI) -- Germany has narrowly avoided slipping into an economic recession, statistics from the fourth quarter of 2018 showed Thursday.

The figures showed Germany's gross domestic product, the chief economic indicator, grew by zero percent during the final quarter. Technically, a recession is classified by any negative growth for two consecutive quarters. Germany recorded 0.2 percent negative growth in the third quarter.

The German economy grew 0.6 percent over the same period in 2017.

"The quarter-on-quarter comparison (price, seasonally and calendar adjusted) reveals that positive contributions mainly came from domestic demand," the Federal Statistics Office said. "Gross fixed capital formation, especially in construction but also in machinery and equipment, increased markedly compared with the third quarter of 2018."

The report showed household consumption expenditures increased slightly while general government expenditures were markedly up at the end of last year.

The challenge came in foreign trade, where according to provisional calculations, exports and imports increased at nearly the same rate in the quarter-on-quarter comparison.

Other negative factors included a decline in auto sales, the U.S.-China trade conflict and uncertainty over Britain's plan to depart the European Union next month. Also, low water in the Rhine over the hot summer last year impeded industrial barges headed in and out of the country.

Some experts say they're confident Germany will post better numbers for the first quarters of 2019.

"Economic fundamentals remain solid and from here on, chances of a gradual rebound are still much higher than chances of yet another disappointment," ING Diba bank economist Carsten Brzeski said.