Germany's economy slowed unexpectedly in the last three months of 2004.

Tuesday's report from the government statistics office says the German economy shrank two-tenths of a percent in the fourth quarter and was flat in the previous quarter.

Economists blamed shrinking domestic demand for the slowdown in Europe's largest economy.

Analysts say German consumers have been made cautious by high unemployment and a debate about cutting social welfare programs.

What growth there has been in the economy has been in the export sector, but the growing strength of the euro could slow that expansion by rendering German-made products more expensive overseas.

Some information for this report provided by AP, AFP, Reuters and Bloomberg.