12 January 2011 Last updated at 04:38 ET

German economy grew by 3.6% in 2010

Consumer spending has picked up

The German economy rebounded strongly in 2010, growing by 3.6%, according to provisional figures from the national statistics office.

This is stark contrast to many European economies that are stagnating or growing much more slowly.

German GDP grew at its fastest pace since reunification in 1990, as an export recovery was matched by increased domestic demand.

Europe's biggest economy had contracted by 4.7% in 2009.That had been its worst performance since World War II.

Domestic demand

Exports from Germany, the world's second biggest exporter after China, grew by 14.2% last year, following a 14.3% decline in 2009.

In a statement, the Federal Bureau of Statistics added: "What was striking in 2010 was the fact that economic growth was not only based on foreign trade, but also on domestic demand."

Investment in machinery and equipment was up 9.4%, after a decline of 22.6% the previous year.

Household spending was up 0.5%, after a 0.2% fall in 2009, and imports rose 13%, recovering from a 9.4% drop the previous year.

Germany is driving the eurozone's fragile economic recovery, whereas smaller economies such as the Irish Republic, Greece and Portugal have been struggling with large debts.

Data on Wednesday also showed the country's budget deficit was 3.5% of GDP.

That meant, that for the first time in five years, it had exceeded the 3% limit laid down by EU rules.