Final German Q4 GDP Saw Stronger-Than-Expected Gain

GERMANY Q4 FINAL GDP +0.3% Q/Q SA; -3.7% Y/Y WDA

GERMANY Q4 FINAL GDP REVISED FROM FLASH +0.1% Q/Q SA; -3.9% Y/Y WDA

• German GDP rose 0.3% q/q in Q4, slightly stronger than estimated in flash results.
• Annual growth stood at -3.7% in Q4, up from -3.9% reported in the flash estimate.
• The second wave of Covid-19 and the renewed lockdown slowed the recovery significantly at the end of the year.
• Household consumption took the largest hit, falling by 3.3% in Q4 after rebounding to 10.8% in Q3.
• Government consumption eased by 0.5% in Q4, almost offsetting Q3's uptick of 0.6%
• Gross fixed capital formation in machinery and equipment declined by 0.1% in Q4, while gross fixed capital formation in construction rose 1.8%, contributing positively to growth.
• Foreign trade improved in Q4 and contributed positively to growth as well, with exports rising 4.5%, while imports were up 3.7%.
• Annual domestic demand remains subdued, with household spending down 6.5% y/y, while investment in machinery and equipment fell 6.0%.
• On the other hand, government consumption was up 2.6% on an annual basis.