Germany's economy grew at the fastest rate in four years in 2004, helped by strong exports, preliminary Federal Statistics Office data showed today.
Gross domestic product expanded by 1.7 per cent last year, the biggest increase since 2000, after a slight contraction in 2003, the office said.
"Overall, the German economy saw a clear recovery in 2004. However, the labour market and weak domestic demand remain problems," Statistics Office President Mr Johann Hahlen told a news conference.
The statistics office said an unusually high number of working days and exports powered headline growth. Adjusted for the impact of an extra five working days, Europe's largest economy would have grown just 1.1 per cent, the Office said.
Net exports - the difference between exports and imports - contributed 1.2 percentage points to overall growth, after subtracting 0.6 per cent in 2003.
In contrast private consumption - which accounts for around 60 per cent of the economy - slumped for the second time in three years. Economists, searching the data for clues about what it might mean for 2005, were disappointed.
"That the work-day adjusted growth figure of 1.1 per cent is slightly below expectations, suggests that fourth-quarter growth was particularly weak, perhaps only 0.2 or 0.1 per cent over the previous quarter," said Mr Holger Schmieding of Bank of America.
"This is not a good start for the new year, we will be lucky if we can match last year's work-day adjusted growth rate," he added. Germany's government has forecast growth this year of 1.7 per cent.
In a statement, Economy Minister Mr Wolfgang Clement said the recovery was likely to broaden in 2005.