German GDP rises 0.4 pct sequentially in Q4, highlights strength of the economy ahead of elections

Data from Destatis showed on Thursday that Germany's economic growth accelerated 0.4 percent sequentially in the fourth quarter. Data was inline with expectations and compared to a  0.1 percent expansion seen in the third quarter.

Europe's largest economy grew at  1.7 percent in calendar-adjusted annualized terms as budget surplus hit its highest mark since unification. On an unadjusted basis, GDP climbed 1.2 percent after climbing 1.5 percent a quarter ago. Data was as expected and highlighted the strength of the economy ahead of elections later this year.

Details of the report showed strong government spending and buoyant construction investments were contributors. Government spending advanced 0.8 percent and household spending by 0.3 percent.

Net trade, however, weighed on growth in the quarter, as imports rose more than exports. The increase in imports of 3.1 percent was markedly larger than the 1.8 percent rise in exports. Investments in plant and machinery declined 0.1 percent from the previous quarter.

Germany's GDP was also boosted by robust budget surplus in 2016. Germany's budget surplus rose to 23.7 billion euros ($25 billion) in 2016, the highest surplus since 1991, the statistics body said.

Germany's economy performed well in 2016 and solid business sentiment and a recent rise in manufacturing orders signal robust economic activity in the months ahead. However, economists have cautioned that uncertainties about U.S. tarde policies and risk of rising anti EU-sentiment ahead of key elections in Germany, France and the Netherlands could dampen economic activity later in the year.