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Germany skirts recession at the end of 2023 but faces prolonged slump
ECONOMY
Germany skirts recession at the end of 2023 but faces prolonged slump
PUBLISHED MON, JAN 15 2024 • 4:15 AM EST | UPDATED 4 HOURS AGO
Ruxandra Iordache
@RMIORDACHE https://twitter.com/RMIordache
KEY POINTS
• The manufacturing sector, excluding construction, fell by a sharp 2%, led by lower production in the energy supply sector.
• The fourth quarter recorded a similar 0.3% drop compared with the July-September period.
• The office said that the German economy stagnated in the third quarter, implying the country has narrowly avoided a technical recession that is defined by two successive quarters of consecutive GDP declines.
Europe’s largest economy contracted by 0.3% year-on-year in 2023, as high inflation and firm interest rates bit into growth, the Federal Statistical Office of Germany said Monday.
The estimate is in line with the expectations of analysts polled by Reuters. The decline in economic output eases to 0.1% when adjusted for calendar purposes.
“The overall economic development in Germany stalled in 2023 in the still crisis-ridden environment,” said Ruth Brand, president of the federal statistics office, according to a Google translation. ... “Despite the recent declines, prices remained high at all levels of the economy. Added to this were unfavorable financing conditions due to rising interest rates and lower demand from home and abroad,” Brand added.
German inflation ticked up by 3.8% year-on-year in December on a harmonized basis, the statistics office said on Jan. 4. The European Central Bank in December opted to hold rates unchanged for the second consecutive time, shifting its inflation outlook from “expected to remain too high for too long” to expectations that it will “decline gradually over the course of next year.”
{snip}
Germany skirts recession at the end of 2023 but faces prolonged slump
PUBLISHED MON, JAN 15 2024 • 4:15 AM EST | UPDATED 4 HOURS AGO
Ruxandra Iordache
@RMIORDACHE https://twitter.com/RMIordache
KEY POINTS
• The manufacturing sector, excluding construction, fell by a sharp 2%, led by lower production in the energy supply sector.
• The fourth quarter recorded a similar 0.3% drop compared with the July-September period.
• The office said that the German economy stagnated in the third quarter, implying the country has narrowly avoided a technical recession that is defined by two successive quarters of consecutive GDP declines.
Europe’s largest economy contracted by 0.3% year-on-year in 2023, as high inflation and firm interest rates bit into growth, the Federal Statistical Office of Germany said Monday.
The estimate is in line with the expectations of analysts polled by Reuters. The decline in economic output eases to 0.1% when adjusted for calendar purposes.
“The overall economic development in Germany stalled in 2023 in the still crisis-ridden environment,” said Ruth Brand, president of the federal statistics office, according to a Google translation. ... “Despite the recent declines, prices remained high at all levels of the economy. Added to this were unfavorable financing conditions due to rising interest rates and lower demand from home and abroad,” Brand added.
German inflation ticked up by 3.8% year-on-year in December on a harmonized basis, the statistics office said on Jan. 4. The European Central Bank in December opted to hold rates unchanged for the second consecutive time, shifting its inflation outlook from “expected to remain too high for too long” to expectations that it will “decline gradually over the course of next year.”
{snip}