Germany's economic growth slows sharply in 2012
"In 2012, the German economy proved to be resistant in a difficult economic environment and withstood the European recession," the federal statistics office Destatis said.
Some analysts believe the German economy will enter recession itself.
Destatis said economic activity "slowed down considerably" in the second half of the year, and particularly in the final quarter.
"The full-year growth figure [of 0.7%] implies a contraction of around half a percentage point in the fourth quarter," the office's top statistician Norbert Raeth said.
Last month, Germany's central bank, the Bundesbank, cut its growth forecast for this year to 0.4% and warned that the economy may have contracted in the final three months of 2012, and may do so again in first quarter of 2013.
The eurozone economy as a whole is already in recession, having contracted in both in the third and fourth quarters of last year.
Spending boost For 2012 as a whole, Destatis said foreign trade was "very robust", with exports up 4.1% on 2011. Imports grew by 2.3%. The positive trade balance was "once again the main driving force for economic growth in Germany".
Household expenditure increased by 0.8%, while government spending was up 1%.
The figures also showed that while the service sector of the economy expanded, industry and construction contracted.
Destatis will publish official fourth-quarter growth figures on 14 February.
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