Germany's gross domestic product fell by 0.3 percent in the fourth quarter of 2023 compared to the previous quarter, according to data from the Federal Statistical Office. The GDP also shows a decline year-on-year, as the GDP decreased by 0.2 percent. This means that after the recession in the third quarter of 2023, the performance of the German economy declined even deeper.
Overall, the fourth quarter data shows that the German economy has not yet been able to bounce back from its predicament. This is not surprising, because weak business confidence and consumer confidence, as well as one of the previous driving sectors, the construction sector, also predicted a decline in the German economy. The Deutsche Bahn rail strike and January's unusual cold and snow certainly contribute to this weak figure.
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The German economy is expected to contract by 0.2 percent in the first quarter of 2024. This means that Germany is still in recession.
Businesses in almost every sector of the economy are complaining of falling demand. Incoming orders have been declining for months, and a wave of cancellations has swept the country, especially in the construction and manufacturing sectors. Timo Wohlmershauser, Head of Research, noted that restrictive monetary policy in Europe and North America now appears to be having its full effect.