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German Economy Probably Contracted 0.5% in Fourth Quarter

Germany’s economy, Europe’s largest, probably shrank in the final quarter of 2012 as the sovereign debt crisis and weaker global growth damped exports and company investment.

Gross domestic product may have dropped as much as 0.5 percent from the third quarter, the Federal Statistics Office in Wiesbaden said today in a preliminary estimate. It said growth slowed to 0.7 percent in 2012 from 3 percent in 2011. Economists had forecast 0.8 percent expansion for last year, according to the median of 28 estimates in a Bloomberg News survey. Germany posted a budget surplus of 0.1 percent of GDP, the first since 2007 and up from a deficit of 0.8 percent in 2011.