BERLIN (Reuters) - German economic growth unexpectedly accelerated to 0.4 percent in the fourth quarter of 2013 thanks to a rise in exports and capital investment, seasonally-adjusted data showed on Friday, suggesting Europe’s largest economy will pick up steam in 2014.
Coming after growth of 0.3 percent in the third quarter, the fourth quarter expansion beat the Statistics Office’s estimate last month for “around a quarter of a percentage point” and the median forecast in a Reuters poll of economists for 0.3 percent.
“It is surprising that exports supported growth, while private consumption was a disappointment,” said Johannes Mayr, an economist at Bayern LB. “The rise in capital investment is very positive and signals that the German economy is starting the new year well.”
Preliminary data from the Statistics Office showed the economy grew by 1.3 percent on the year.
It said “mixed signals” came from the domestic economy, which has driven growth throughout most of the year, with public expenditure stable and private consumption slightly below the level of the previous quarter.
“Capital investment developed positively,” the Statistics Office said. “However a strong reduction in inventories put the brakes on economic growth.”
A bastion of strength during the early years of the euro zone crisis, the German economy slowed down towards the end of 2012 then picked up steam again from the second quarter of 2013 onwards, on the back of strong domestic demand.
The Economy Ministry said on Wednesday it expected growth of 1.8 percent in 2014 - more than four times faster than in 2013.
“The German economy is taking a serious run-up to a strong pickup in 2014,” said Andreas Rees at Unicredit. “We will see significantly better numbers in the course of the year.”
“One reason for that is increasing impulses form the euro zone that will accelerate our exports. Companies will also likely invest more because they held back during the euro crisis and need now to catch up.”
Editing by Stephen Brown