German economy saw weakest growth in 2018

German gross domestic product (GDP) grew 1.5 percent in 2018, compared with 2.2 percent in 2017, the latest data from the Federal Statistics Office (Destatis) showed. The figures point to the weakest rate of growth in five years.

A weaker global economy and problems in the car industry, caused by new pollution standards, have been cited as contributing to the slowdown.

At the start of 2018, the German economy had been expected to grow by 1.8%.

Germany's economy had shrunk in the third quarter of the year, by 0.2%, with global trade disputes blamed for the contraction.

Destatis noted that the German economy had grown for the ninth year in a row, “although growth has lost momentum.”

“In the previous two years, the price adjusted GDP had increased by 2.2 percent each. A longer-term view shows that German economic growth in 2018 exceeded the average growth rate of the last ten years (+1.2 percent).”

The data body also said positive contributions to growth came mainly from domestic demand in 2018.

“Both household final consumption expenditure (+1.0 percent) and government final consumption expenditure (+1.1 percent) were up on the previous year. However, the growth rates were markedly lower than in the preceding three years,” it said.

German exports continued to increase on an annual average in 2018 (up 3.5 percent on the previous year), though at a slower pace than in the previous years.

The statistics office has not released fourth-quarter figures yet, as it does not have enough data to give an accurate reading.

But initial calculations by independent economists suggest the economy may have grown by about 0.2% in the final three months of the year.

The country’s economy ministry said reasons for slower growth in 2018 included a globally weaker economy, sales problems in the car industry as a result of tougher pollution standards, and special effects including an outbreak of flu and strikes, were also to blame for slower growth.

The ministry said the German economy was likely to remain on an upward trend at the start of 2019, however.