A sharp drop in exports is behind a record contraction in Germany’s gross domestic product in the final quarter of last year.Europe’s biggest economy posted its worst performance since reunification in 1990. Exports fell by 7.3 percent but private domestic consumption was only slightly lower, cushioned from the impact of the global downturn by falling energy prices. German GDP shrank 2.1 percent in the quarter and Berlin predicts a decline of 2.25 percent for all of this year. It is anticipated that the British economy will fare even worse in 2009 – falling three percent – and it has been confirmed that in the last three months of 2008 it contracted 1.5 percent. That was the fastest pace of decline since 1980. The official figures, which were not revised from the previous estimate, showed UK households cut spending at the sharpest rate since 1991. The International Monetary Fund expects Britain to be the worst-performing big economy this year, one reason being its dependence on financial services.
German and British GDP declines