The German economy stagnated in the fourth quarter of 2002 as demand for exports slumped. The Federal Statistics Office said this morning that GDP in the eurozone's largest economy was flat in the fourth quarter from the previous three months and was up 0.5p year-on-year. In the third quarter, the economy expanded by 0.3pc quarter-on-quarter and was up 1.0pc from a year earlier. The office said domestic demand grew but that it was offset by weaker foreign demand and government expenditure.
"That [domestic] rise was completely offset by the negative contribution to growth by the net exports which led to a stagnant gross domestic product compared with the preceding quarter," it said. The office added that household expenditure experienced a "relatively mild increase" and government expenditure dropped in the fourth quarter. Earlier this month the Bundesbank published its estimates for the fourth quarter, also predicting stagnant growth but warning that the economy may have contracted slightly. "Real GDP in the fourth quarter of 2002 may have been slightly lower than in the previous three month period," the central bank said in its February report. //www.fxcentre.com