At the same time, expansion in private and government consumption slowed compared with 2016. Overall, growth was almost one percentage point higher than the 1.3-percent average recorded over the past 10 years. Germany also notched up a record government budget surplus of 1.2 percent of GDP, Destatis said.
It was "a strong performance by an economy firing on all cylinders," commented ING Diba bank economist Carsten Brzeski, arguing that the same factors that have favoured the economy will stay in place over the coming year. Defying fears of a new era of protectionism after the US election of Donald Trump, exports grew by 4.7 percent in 2017, compared with 2.6 percent the previous year.
Meanwhile, historic low interest rates set by the European Central Bank, a euro that has not strengthened against other currencies in step with the continent's economic recovery, high levels of employment and a broad-based upturn across the 19-nation eurozone all favour continued expansion for Germany. But the picture is not entirely rosy for Berlin, Brzeski warned.
"Strong growth performance has led to reform complacency. Under the surface of strong growth, deficiencies in areas like digitalisation, services and education have emerged," he said. "The next government still has the unique opportunity to tackle these challenges in good times and not wait until the bad times have started." As the statisticians unveiled the nation's economic performance in Berlin's government quarter, Germany's leading politicians gathered in the Social Democratic Party (SPD) headquarters across town.
Chancellor Angela Merkel's conservatives are making a last-ditch attempt to strike a coalition deal with the centre-left SPD - a prospect greeted with reluctance on both sides after four years sharing power cost both parties dearly in September elections.