Categories: World

German Economy Contracts Faster Than Expected, Recession Looming Related articles

The German economy contracted more than expected in the last quarter of last year. This was reported by the federal statistical agency Destatis. Provisional data assumed a contraction of 0.2 percent compared to the third quarter, but it now appears to be 0.4 percent. This increases the likelihood of a recession.

In the last quarter of 2022, the largest economy in the Eurozone had to contend, among other things, with a drop in consumption, after three quarters of growth. For example, the economy grew 0.5% between the second and third quarters. On an annual basis, growth was 0.9%. But even here expectations were higher, with an expected increase of 1.1%. Economists expect another negative result this quarter, which would push the economy into a recession.

To trust

German consumers still looked forward to March with confidence, reports market researcher GfK. In one survey, respondents said they were more confident about their income prospects and the economy. They also seemed more inclined to make bigger purchases than they had a month earlier. However, according to GfK, consumer confidence remained at a low level.

It was also announced on Friday that Germany spent more money than it received last year. The budget deficit was 2.6%, which amounts to about 101 billion euros. In particular, billion-dollar aid to curb the energy crisis has put pressure on the federal budget.

The German economy contracted more than expected in the last quarter of last year. Provisional data assumed a contraction of 0.2 percent compared to the third quarter, but it now appears to be 0.4 percent. This increases the likelihood of a recession. (Unsplash)

Author: ap
Source: BNR

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