The eurozone’s largest economy slowed sharply at the end of last year

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Germany, the largest economy of the European Union, shrank in the last quarter of 2022 by 0.2% compared to the third quarter of the year, and in annual terms showed a small growth.

It is reported Financial Times.

Germany’s gross domestic product fell by 0.2% in the fourth quarter of 2022, compared to the third quarter. This result is a sharp slowdown compared to growth of 0.5% in the third quarter of last year.

“After the German economy held up well in the first three quarters despite challenging conditions, economic output fell slightly in the fourth quarter,” the German statistics agency Destatis said.

In the first publication, Destatis did not provide a breakdown of GDP by sector, but noted that private consumer spending was the key driver of the decline. The reason for this is high gas prices and high rates of the European Central Bank, which weakens demand in the country.

In annual terms, the country’s GDP grew by 1.1% in the fourth quarter – slower than +1.3% expected by economists polled by Reuters.

According to Franziska Palmas, senior European economist at Capital Economics, the German economy, given the increase in interest rates and the persistence of high prices, “will at best remain at the level of the first half of 2023, and will grow very slowly thereafter.”

We remind you:

Chancellor Olaf Scholz statedthat he is confident that Germany will avoid recession this year, as the country weathers the winter energy crisis better than expected.

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