The eurozone debt crisis brought the German economy, Europe’s biggest, to a standstill at the end of last year, data showed yesterday, but the pause in growth will prove only temporary, analysts said.
According to preliminary figures from the national statistics office, Destatis, Germany’s GDP contracted by 0.2 percent in the fourth quarter of last year compared with the preceding three months.
That was fractionally better than expected — analysts had been penciling in a contraction of about 0.3 percent. Furthermore, third-quarter growth was revised upward slightly to 0.6 percent quarter-on-quarter, compared with an original estimate of 0.5 percent.
A precise breakdown of the growth data is to be published next week, but exports — traditionally the engine of the German economy — appeared to have been hit by the long-running debt crisis in the single currency area.
“The German economy suffered a small setback at the end of 2011,” Destatis said in a statement. “Foreign trade had a negative effect on the economy in the final quarter of 2011, but consumer spending also declined slightly.”
The only positives came from investment on a quarter-on-quarter basis in the period from October to December, with construction investment, in particular, much higher than in the third quarter, Destatis said.
Last month, the statistics authority had estimated that GDP would likely contract by about 0.25 percentage points in the fourth quarter as the debt crisis slammed the brakes on growth.
Nevertheless, taking last year as a whole, the German economy grew by a robust 3 percent after growing by a record 3.7 percent the previous year.
Analysts predicted that the lull in growth at the end of last year would likely be short-lived.
The dip in GDP was “not as deep as expected, confirming that the German economy only took a growth pause and is not approaching a new recession,” ING Belgium economist Carsten Brzeski said.
Low inventories and a still high backlog of orders would act as “an important safety net for industry, ensuring production even if demand for German products would weaken,” he said.
Annalisa Piazza at Newedge Strategy also believed the fourth-quarter GDP figures were “a touch less gloomy than expected.”
It was “the first contraction in activity since early 2009 and — in our view — just a one-off event,” the analyst said, predicting a “modest improvement already in the first half.”
Meanwhile, France’s economy grew 1.7 percent last year, in line with the government’s target, after a better-than-expected fourth quarter growth of 0.2 percent, the national statistics institute INSEE said yesterday.
The government had maintained its forecast of 1.75 percent, even though most economists expected growth for the year to be 1.6 percent, forecasting a contraction of 0.2 percent in the three months to December.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six