Yesterday morning, the German Federal Statistical Office released the first estimate of German GDP growth for 2011. According to the report, German GDP grew by 3.0% Y/Y in 2011,down from 3.7% Y/Y in 2010, but in line with market expectations. While the German economy continued to grow strongly, most of it occurred in the first half of the year. Thedetails show that the main impetus for growth in 2011 was provided by domestic demand with household consumption growing by 1.5% Y/Y and gross fixed capital formation jumped by6.5% Y/Y. Growth in both exports and imports slowed from 2010, but the balance remained positive and contributed 0.8% to GDP growth. The Statistical Office added that German GDPcontracted by 0.25% Q/Q in the final quarter of 2011, according to the first estimate. More details for the Q4 data will be published in February. Together with the GDP data, theOffice released budget figures. According to those data, the budget deficit shrank from 4.3% of GDP in 2010 to 1.0% of GDP last year, well below the 3% target set by theMaastricht Treaty. In both 2009 and 2010 the deficit had exceeded this reference value. While the German economy continued to grow strongly last year, the forecasts for this yearare less bright as the Bundesbank expects growth to slow down to 0.6% Y/Y, before slightly picking up in 2013.