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Foreign trade drives Q4 German growth as domestic demand disappoints

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German Chancellor Angela Merkel

German Chancellor Angela Merkel

German Chancellor Angela Merkel

Foreign trade propelled growth in Europe's largest economy in the fourth quarter while domestic demand, which had been a key growth driver throughout the rest of the year, was a drag.

Seasonally-adjusted data from the Federal Statistics Office published today confirmed an earlier flash estimate showing German gross domestic product increased by a modest 0.4pc on the quarter between October and December compared with 0.3pc during the previous three months.

A detailed breakdown showed domestic demand subtracted 0.7 percentage points from growth while foreign trade, which had been weak for much of 2013, added 1.1 percentage points to GDP.

The statistics office said the domestic economy sent "mixed signals". Capital investment picked up significantly, big inventory reductions slammed the brakes on growth and public expenditure was stagnant while private consumption dipped

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