German economy contracted 0.3% in 2023 – stats office

Construction sites are photographed in Frankfurt, Germany, July 19, 2023. Germany’s property sector is in stress, underscoring a major change of fortune for real estate in Europe’s largest economy after an end to the era of cheap money. REUTERS/Kai Pfaffenbach/File photo

BERLIN  – The German economy contracted by 0.3 percent in the final quarter of last year and shrank by 0.3 percent over the full-year 2023, the Federal Statistics Office said on Monday.

“Overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises”, said Ruth Brand, president of the office, on Monday in Berlin.

The full-year decrease in gross domestic product (GDP) is in line with the forecast by analysts polled by Reuters.

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“Despite recent price declines, prices remained high at all stages in the economic process and put a damper on economic growth,” Brand said. “Unfavorable financing conditions due to rising interest rates and weaker domestic and foreign demand also took their toll.”

The euro zone’s largest economy stagnated in the third quarter compared with the previous three months, following the revision of the statistics office.

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A recession is commonly defined as two successive quarters of contraction. With the stagnation in the third quarter, the German economy skirted a recession.