The German economy shrank in 2009 for the first time in six years, with the 5.0% decline in the price-adjusted gross domestic product (GDP) being the largest World War II.

What was striking in 2009 is that both exports and capital formation in machinery and equipment slumped heavily.

The largest forces pulling GDP down was:

• The balance of exports and imports made a negative 3.4% contribution much larger than the minus 0.3% in 2008.
• Gross fixed capital formation in machinery and equipment was down 20.0% compared to 2008

The only positive contribution to GDP in 2009 was made by final consumption expenditure by households (up 0.4%) and government final consumption expenditure up 2.7%.

This 5% lower GDP was produced with an average 40.2 million workers only 37,000 people or 0.1% less than a year earlier.

That just shows how many workers were under-utilised or on the government assisted short work program.



Source: Preliminary German Federal Statistics Office release

 Tim du Toit is the editor of Eurosharelab. Kindly note that this blog is published for information purposes and is not investment advice. Please refer to our disclaimer.

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