German economy escapes recession but remains stalled

BERLIN (Reuters) - The German economy remained stalled in the final quarter of last year, escaping recession only by the narrowest of margins after contracting in the July-September period for the first time since 2015.

Gross domestic product (GDP) in Europe's biggest economy was unchanged on the quarter, the Federal Statistics Office said on Thursday, undershooting expectations in a Reuters poll for 0.1 percent growth.

German companies are grappling with a cooling global economy and trade disputes triggered by U.S. President Donald Trump's 'America First' policies. The risk that Britain leaves the European Union without a deal in March only added to the uncertainty.

"Germany got away with a black eye," DekaBank economist Andreas Scheuerle said of the fourth quarter numbers.

"But the first quarter is not looking like it is going to be easy either, as political uncertainties are weighing heavily on corporate confidence," he added.

With growth unchanged in the fourth quarter, the economy escaped recession -- defined as two or more consecutive quarters of negative growth -- after it contracted by 0.2 percent in the third quarter.

Germany's economy grew at its weakest rate in five years in 2018. Growth is forecast to shrink further to 1 percent this year and the country is facing a budget shortfall of around 25 billion euros by 2023.

(Reporting by Paul Carrel and Rene Wagner; editing by Thomas Seythal and Balazs Koranyi)