The German gross domestic product (GDP) fell by 2.1% in the fourth quarter 2008 as compared to the third quarter after adjustments for price, season and calendar. This was the biggest drop in GDP between two quarters since German reunification. Even though German GDP had grown by 1.5% over the first three months in 2008, it fell by 0.5% in the second and third quarter respectively. As compared to the fourth quarter in 2007, German GDP fell by 1.6% in the fourth quarter 2008 (-1.7% after adjustment for calendar).
The main reasons for this drop in GDP are less investment in equipment and machinery and rapidly decreasing exports.
Consumer spending also slightly fell as compared to the third quarter which was in particular due to reduced spending by private consumers. The volume of goods in stock increased significantly in the fourth quarter 2008.
German GDP in the fourth quarter 2008 was generated by 40.8 million gainfully employed people which was a plus by 422,000 people (1.0%) as compared to the previous year. This employment figure was the biggest since German reunification. However, growth in employment has clearly decelerated since the beginning of 2008.