German Growth Surprise Driven by Domestic Demand



German economic growth accelerated at the end of last year while France’s slowed, signaling that the euro-area recovery remained uneven as the European Central Bank prepared to pledge unlimited quantitative easing.

German gross domestic product surged 0.7 percent in the fourth quarter after expanding 0.1 percent in the previous three months, the Federal Statistics Office in Wiesbaden said today.

The French economy grew 0.1 percent after 0.3 percent in the July-September period. Analysts surveyed by Bloomberg News predicted fourth-quarter growth of 0.3 percent and 0.1 percent, respectively.

Seven years after the onset of the global economic crisis, the 19-nation euro area is still plagued by falling prices and high unemployment, while a showdown between Greece and its European partners over the country’s debt has rekindled the risk of a euro break up. A slump in oil prices is helping domestic demand and more stimulus is the pipeline from the QE plan by the ECB that has already weakened the euro.

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