German GDP upwardly revised to +0.3% QoQ in Q4 Strong exports and other factors

BERLIN, Jan 24 (Reuters) - Germany's gross domestic product (GDP) rose 0.3 percent in the fourth quarter, up from a preliminary reading of 0.1 percent, the Federal Statistical Office said on Thursday. Exports and construction were strong.

On a year-on-year basis, GDP fell by 2.7%. The preliminary figure was down 2.9%.

For the full year 2020, GDP fell by 4.9%, revised up from the preliminary estimate of 5.0%.

Excluding the impact of the calendar, GDP would have grown by 5.3% in 2020. Excluding calendar effects, growth in 2020 would have been negative at 5.3%, but the decline would have been smaller than in neighbouring countries, supported by the government's massive fiscal stimulus.

In 2020, the federal budget deficit will amount to €139.6 billion, representing 4.2% of GDP. This is the first time since 2011 that the country has run a budget deficit.

Economy Minister Altmeyer said the GDP figures were a positive sign and that "we will do everything we can to maintain the economic situation in the coming months".

Germany's GDP rose by 8.5% in the third quarter, after falling by 9.7% in the second quarter due to the first lockdown.

The second lockdown, which began in early November, led to a sharp fall in consumer spending in the fourth quarter, according to the statistics office. However, measures to support employment led to a slight increase in disposable income. The savings rate was an exceptionally high 15.7% as a result of the restraint on consumption.

Exports rose by 4.5% in the fourth quarter compared with the previous quarter, while consumer spending fell by 3.3%. Construction investment rose by 1.8%.

Thomas Gitzel of the VP Bank said that low interest rates had a positive impact on the construction sector. The export-heavy manufacturing sector also benefited from increased demand from China, he said.

The outlook is uncertain, however, as the lockdown has been extended until at least March 7.

In a report, Unicredit maintained its forecast for GDP in the first quarter of 2021, which is 1.5% lower than in the previous quarter.

ING's Carsten Brzeski said the downside risks for the first quarter of 2021 were the tightening of the lockdown from mid-December, the cold snap in February, a rebound from the rush of demand ahead of the end of the UK's transition period out of the EU, and weaker demand, mainly from eurozone countries. The drivers of growth in the fourth quarter of last year could easily become a drag in the first quarter," he said.