Germany issues a preliminary full-year growth figure before giving an official fourth-quarter growth number, which is due next month. The Federal Statistical Office estimated that the economy grew by around a quarter of a per cent in the fourth quarter.
The full-year figure released by the Federal Statistical Office was in line with economists' expectations and was the best performance by Europe's biggest economy since it expanded by 3.6 per cent in 2011. In 2012 and 2013, gross domestic product expanded by 0.4 per cent and a feeble 0.1 per cent respectively.
The economy made a fast start last year before contracting slightly in the second quarter and returning to slight growth in the summer.
Despite fallout from the Ukrainian crisis and the eurozone's weakness, "the economic success story continued as unemployment remained low, employment reached a new record high and private consumption turned out to be an important growth driver," ING-DiBa economist Carsten Brzeski said.
German exports were up 3.7 per cent last year despite the "difficult external economic environment," accelerating from a 1.6 per cent increase the previous year, the statistical office said. Imports were up 3.3 per cent, compared with 3.1 per cent in 2013.
That meant that foreign trade contributed a "relatively small" 0.4 percentage points to overall economic growth.
More momentum came from the domestic economy, with investment in machinery and equipment by businesses and the government rising 3.7 per cent after declining significantly in the two previous years. Household spending was up 1.1 per cent.
Germany's budget surplus increased to 0.4 per cent last year from 0.1 per cent the previous year — a contrast with the large deficits several other eurozone countries are running. The government said this week that it was able to do without new borrowing last year — a year earlier than planned — for the first time since 1969.