The figure was well below the 3% growth seen in 2011 and suggests the economy contracted in the fourth quarter.

 

"In 2012, the German economy proved to be resistant¹ in a difficult economic environment and withstood（抵挡） the European recession," the federal statistics office Destatis said.

 

Some analysts² believe the German economy will enter recession itself.

 

Destatis said economic activity "slowed down considerably³" in the second half of the year, and particularly in the final quarter.

 

"The full-year growth figure [of 0.7%] implies a contraction⁴ of around half a percentage point in the fourth quarter," the office's top statistician Norbert Raeth said.

 

Last month, Germany's central bank, the Bundesbank, cut its growth forecast for this year to 0.4% and warned that the economy may have contracted in the final three months of 2012, and may do so again in first quarter of 2013.

 

The eurozone economy as a whole is already in recession, having contracted in both in the third and fourth quarters of last year.

 

 

For 2012 as a whole, Destatis said foreign trade was "very robust⁵", with exports up 4.1% on 2011. Imports grew by 2.3%. The positive trade balance was "once again the main driving force for economic growth in Germany".

 

Household expenditure⁶ increased by 0.8%, while government spending was up 1%.

 

The figures also showed that while the service sector⁷ of the economy expanded, industry and construction contracted.

 

Destatis will publish official fourth-quarter growth figures on 14 February.

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