German economy grows 1.4 percent in 1999

Ulhas Joglekar ulhasj at
Fri Jan 14 17:27:13 PST 2000

13 January 2000 German economy grows 1.4 percent in 1999 WIESBADEN, Germany: Gross domestic product in Germany rose a 1.4 percent in 1999, keeping in line with economist expectations but slowing down from 1998's growth rate of 2.2 percent. The German government had predicted the Europe's largest economy to grow at about 1.5 percent last year, but is forecasting output to pick up and grow by 2.5 percent in 2000. "GDP toward the end of the year showed signs of brightening," said Johann Hahlen, president of the government statistics office. "A bottom has been reached." The federal statistics office said private consumption, up 2.0 percent, and capital investment, up 5.1 percent, were the main driving forces behind German growth in 1999. Still, they were offset by a fall in construction investment and a big increase in imports. Economic productivity - a measure of not just total output but of output per worker - rose 1.1 percent. That figure will play a key role in upcoming wage negotiations between the country's manufactures and powerful unions. On Tuesday, the metalworking and electronics IG Metall union - Germany's largest representing 3.4 million workers - forwarded demands for a 5.5 percent wage increase, basing its figures on a rise in productivity of 3.5 percent in 2000. Although the statistics office won't release fourth quarter growth figures until early March, Hahlen gave an estimate, saying, "The fourth quarter is likely to have grown a real 2 percent year-on-year." He said that was do to companies boosting output ahead of the year 2000 date change. Hahlen emphasized that growth accelerated toward the end of the year, with GDP edging forward just 0.7 percent in the first quarter but increasing to 1.2 percent for the second and third quarters. Germans also worked 1.4 fewer days in 1999, compared with 1998, but that had only a small effect on growth for the year, he said. For reprint rights: Times Syndication Service
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