Germany's economic expansion lost steam in 2018, with annual price-adjusted GDP growth dropping to its slowest pace in five years at 1.5%, compared with 2.2% in the previous year, preliminary data from the country's Federal Statistical Office showed.
After price and calendar adjustments, German GDP growth was 1.5% in 2018, down from 2.5% in 2017 and representing the slowest growth in three years.
Domestic demand contributed positively to GDP growth, with household consumption up 1.0% and government expenditure up 1.1% on an annual basis in 2018, though the growth rates were markedly lower than in the preceding three years. Gross fixed capital formation grew 4.8% annually in 2018, after adjustments for price.
Price-adjusted German exports rose 2.4% in 2018, while imports added 3.4% year over year, contributing a negative net impact on the country's GDP growth. The German government's budget surplus expanded in 2018 to €59.2 billion from €34.0 billion in the prior year.
The full-year GDP numbers came amid concerns that Germany was at risk of entering a technical recession in the second half of 2018 following a weak industrial production reading for November 2018. Germany logged its first quarterly contraction since 2015 in the third quarter of 2018 due to weaker exports.
"An official estimate of fourth-quarter  growth will only be available in February but with 1.5%, it looks as if a technical recession could only just have been avoided," said Carsten Brzeski, chief economist at ING Germany, in a note.