Germany contracted in the last quarter
Gross Domestic Product (GDP) in Germany decreased by 0.2 percent in the fourth quarter of 2022 compared to the previous quarter due to the energy crisis and record inflation. Thus, the economy gave signs that it may be entering a recession due to the war in Ukraine.
Economists did not expect a change in leading gross domestic product in the fourth quarter.
While many experts predicted that the German economy will also contract in the first quarter of 2023, the contraction in the fourth quarter showed that a recession, which is often used to describe two consecutive quarters of contraction, became more likely.
Fourth quarter growth in the country missed expectations on a year-over-year basis. The economy grew 0.5 percent in the latest quarter, against expectations of 0.8 percent a year.
INFLATION SLOWS PRIVATE CONSUMPTION
“After the German economy performed well in the first three quarters of last year despite difficult conditions, economic performance slowed down somewhat in the fourth quarter of 2022,” the German Federal Statistical Office (Destatis) said. it’s a statement.
The main reason why the German economy contracted in the last quarter was high inflation that held back private consumption. Destatis will publish the detailed data for the last quarter on February 24.
Economists expect GDP to fall further in the first quarter of this year as Europe’s largest economy is in recession. The technical recession is expressed as “two quarters of a GDP contraction”.
GROWTH EXPECTATIONS HAVE BEEN HIGH
Germany experienced its first recession since 2009 in 2020, the first year of the Covid-19 outbreak after 10 years of good economic growth.
In Germany, the government raised its growth expectation, previously announced as minus 0.4 percent, to 0.2 percent on January 25 of this year.
Annual inflation in the country, on the other hand, fell to 7.9 percent, falling for the second consecutive month in December due to falling energy prices and the government’s one-time payment of household energy bills. .