Germany Slipped Into Recession in 2004

The German economy, the biggest in the 12-country euro zone, slipped into another shallow recession at the end of last year, new data published by the federal statistics office, Destatis, showed on Thursday. According to the revised data, German gross domestic product contracted slightly in both the third and fourth quarters of 2004. And since recession is technically defined as two consecutive quarters of negative growth, the numbers meant Germany effectively entered into its second very shallow recession in two years. Originally, Destatis had calculated that GDP stagnated in the period from July to September 2004 and contracted by 0.2 percent in the period from October to December. But the revised numbers showed on Thursday that third-quarter GDP contracted by a fractional 0.04 percent, while fourth-quarter GDP declined by 0.1 percent. The last time Germany was in recession was in the final quarter of 2002 and the first quarter of 2003. Nevertheless, German growth looks set for a technical rebound in the first quarter of 2005. The Bundesbank is pencilling in growth of "around 0.5 percent" in the period from January to March, the German central bank's president Axel Weber said on Tuesday.