Off year
January 13, 2010
The extent of the damage felt in Germany by the global financial crisis was revealed on Wednesday with the release of new economic figures by the Federal Statistics Office.
"As an export-dependent nation, Germany was particularly affected by the financial crisis," commented Federal Statistics Office President Roderich Egeler. "With a GDP drop of five percent, the country is relatively far behind other nations."
Germany's gross domestic product (GDP) shrank by five percent in 2009, with a particularly heavy slump in the first half of the year. But the statistics show that the GDP stabilized in the second half of 2009.
The export industry was particularly hard hit, with a drop of 14.7 percent in overseas trade during the year. "All in all the export trade in 2009 was not the motor of economic development we're used to, but the brakes on it," Egeler said.
But private consumer spending recorded a slight rise of 0.4 percent, due in large part to the government-sponsored "cash-for-clunkers" scheme, which boosted sales in the auto industry.
Germany also breached the European Union's public deficit ceiling for the first time in four years, the office found. Berlin racked up a budgetary deficit of 77 billion euros ($112 billion), or 3.2 percent of GDP in 2009. The EU's Stability and Growth Pact, which is meant to ensure the stability of the bloc's common currency, requires all member states that use the euro to keep their public deficit under three percent of GDP. Several eurozone economies have been struggling to stay under the ceiling.
Jobs spared
But despite these dramatic figures, unemployment remained at a similar level to 2008, with 3.27 million people unemployed in Germany in December 2009. "It's notable that the effects of the crisis have barely registered on the employment market," Egeler said.
According to the Federal Statistics Office, companies largely refrained from redundancies in favor of putting employees on short-term contracts and reduced working hours.
German salaries also sank for the first time since reunification in 1990, with a 0.4 drop in gross income, and a 0.9 fall in net income.
And there was a significant rise in company insolvencies, with 27,565 reported between January and October 2009, an increase of 11.7 percent on the same period in 2008.
bk/AFP/AP/dpa
Editor: Chuck Penfold