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German economy shrank 0.2% in Q4, worse than expected

2023/01/30/12:33
in Financial insights
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Official figures show that Germany’s economy shrank by 0.2% in the fourth quarter compared with the previous three-month period

Germany’s economy shrank by 0.2% in the fourth quarter compared with the previous three-month period, official figures showed Monday. The performance by Europe’s biggest economy was worse than expected.

Gross domestic product shrank for the first time since the first quarter of 2021 largely because of a decline in consumer spending, which had supported the economy in the first nine months of 2022, the Federal Statistical Office said. The drop followed GDP growth of 0.5% in the third quarter and 0.1% in the second quarter.

The statistics office said in mid-January, before it had full December economic data, that the economy appeared to have stagnated in the fourth quarter. Monday’s announcement prompted it to revise last year’s full-year growth figure down to 1.8% from the 1.9% it initially reported.

Germany’s annual inflation rate rolled back from a peak of 10.4% in October to 8.6% in December, but galloping prices remain a major headache.

A potential energy crunch following Russia’s invasion of Ukraine and the end of its gas supplies to Germany also was a concern last year. But Germany’s network regulator said earlier this month that a gas shortage was “increasingly unlikely” this winter.

Source: abcNEWS

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