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Germany Hikes 2006 Growth Estimate, Second Half Stronger than Expected

Germany's Federal Statistics Office on Tuesday raised its overall 2006 gross domestic product growth estimate after fourth-quarter results came in much stronger than expected.

According to the Wiesbaden-based agency, gross domestic product grew by 0.9% in the final three months of the year on the previous quarter, based on preliminary data using seasonally and calendar adjusted terms.

That was higher than the average 0.6% predicted by 20 economists surveyed by Dow Jones Newswires.

As a consequence, German 2006 GDP rose by an upwardly revised 2.7% on the year, in unadjusted terms, compared with the 2.5% gain reported in January, the agency said. That's the strongest growth rate since 2000.

The growth was helped by strong exports, while higher domestic investment and a pickup in private consumption also spurred activity, the agency said.

"However, the extremely dynamic foreign trade contributed by far more to the economic upturn in the reference quarter," the agency said in a statement.

Fourth-quarter growth was 3.5% in 2006 over the same quarter the year before in unadjusted terms.

The statistics office also revised third quarter estimates up to 0.8% from the same period the year earlier, and also raised its second quarter estimates to 1.2% growth. It had previously estimated 0.6 percent and 1.1% growth respectively.

When adjusted for the number of working days each year, German GDP rose 2.9% in 2006, up from 2.7% previously reported.

More detailed results are scheduled to be released Feb. 22.