There was an unexpected slowdown in economic growth in the euro zone in the last three months of 2004 as Germany’s economy, which is the region’s largest, shrank for the first time in more than a year. According to the European Union statistics agency, Eurostat, the euro zone’s economy continued a downward trend and grew at a rate of just 0.2% in the fourth quarter.
For all of 2004 the euro zone economy grew by 2%.
Germany’s economy shrank by 0.2% in the fourth quarter. Economists had expected it to grow by about that amount compared to the quarter earlier. That more than offset growth in France and Spain which was 0.8%.
Germany’s economy expanded by 1.6% for all of last year, the strongest full-year growth since 2000. Labour and Economy Minister Wolfgang Clement said the government would not revise its estimate for growth this year of 1.6% despite the slowdown at the end of last year.
Germany’s main problem remains weak spending by consumers, who are worried about the high unemployment rate, currently at 12.1%. Recent major job cuts at carmaker Opel, a subsidiary of General Motors, and at department store chain KarstadtQuelle did not help.