๐ The Federal Statistical Office Destatis reported that 2023 ended with the GDP declining by 0.3%. This was the biggest slowdown since 2020, when the Covid pandemic had sent the economy down 3.8%, breaking a 10-year positive upward trail. According to IMF estimates last year, among the large economies, Germany filed the worst performance worldwide: the U.S. economy is expected to close up 2.1%, the Eurozone 0.7% and the U.K. 0.5%, worse even than France, Italy and Spain, which will record a growing GDP.
๐ The outlook for 2024 is not positive either: several analysts had already cut their forecasts when the government had to reduce spending plans to deal with a 60 billion euro hole in Germany’s accounts, which came to light thanks to a constitutional court ruling on some funds posted off-budget.
๐ There are two main reasons explaining this: the loss of cheap Russian energy and lower exports, especially to China. Despite price declines, German industrialists complain that they still pay three to four times more for energy than they did before the Russian invasion of Ukraine and more than five times as much as their U.S. competitors. The automotive sector seems to be the one that took the worst hit, as German car companies are not being able to stand the competition against their peers from China and the US.
๐ Retail sales, which also appeared to be declining, did not help GDP either. Households have been hit by the largest cost-of-living increase this generation has ever seen. Inflation has fallen from over 11 percent at the end of 2022 to a low of 2.3 percent last November. “Despite the recent declines, however, prices have remained high at all stages of the economic process and have put a drag on economic growth,” Brand said, again explaining the statistics agency’s data.
Source: Repubblica
ย
NEW MOMENTUM AV, S.A. uses technical, preference and analysis cookies, both its own and those of third parties, which process connection and / or device data to facilitate browsing and analyse statistics on the use of the website. Further Information. Change preferencesAccept
Change preferences
Cookie Privacy Summary
This website uses cookies to improve your user experience while browsing the website. Cookies categorised as necessary are stored in the browser as these are essential for the basic functionality of the web to work. We also use third party cookies to help us analyse and understand how to use and improve this website. These cookies are stored in the browser only with your consent. You have a choice of cookies so that you can select the ones you feel are most appropriate, but not accepting some of these cookies may affect your user experience on the website.
These cookies are those that facilitate user navigation and the use of the different options or services offered by the website, such as identifying the session, allowing access to certain areas, facilitating orders, purchases, filling in forms, registration, security, facilitating functionalities (videos, social networks, etc.).
These cookies are used to carry out an anonymous analysis of the behaviour of web users and to measure user activity and create browsing profiles in order to improve the websites.
These cookies allow to manage the advertising spaces on the web. In addition, they can be personalised advertising cookies, and thus allow to manage the advertising spaces of the website, based on the userยดs browsing behavior and habits, from which their profile is obtained and allow the advertising shown on the user's browser or other user profiles and social networks to be personalised.
๐ The Federal Statistical Office Destatis reported that 2023 ended with the GDP declining by 0.3%. This was the biggest slowdown since 2020, when the Covid pandemic had sent the economy down 3.8%, breaking a 10-year positive upward trail. According to IMF estimates last year, among the large economies, Germany filed the worst performance worldwide: the U.S. economy is expected to close up 2.1%, the Eurozone 0.7% and the U.K. 0.5%, worse even than France, Italy and Spain, which will record a growing GDP.
๐ The outlook for 2024 is not positive either: several analysts had already cut their forecasts when the government had to reduce spending plans to deal with a 60 billion euro hole in Germany’s accounts, which came to light thanks to a constitutional court ruling on some funds posted off-budget.
๐ There are two main reasons explaining this: the loss of cheap Russian energy and lower exports, especially to China. Despite price declines, German industrialists complain that they still pay three to four times more for energy than they did before the Russian invasion of Ukraine and more than five times as much as their U.S. competitors. The automotive sector seems to be the one that took the worst hit, as German car companies are not being able to stand the competition against their peers from China and the US.
๐ Retail sales, which also appeared to be declining, did not help GDP either. Households have been hit by the largest cost-of-living increase this generation has ever seen. Inflation has fallen from over 11 percent at the end of 2022 to a low of 2.3 percent last November. “Despite the recent declines, however, prices have remained high at all stages of the economic process and have put a drag on economic growth,” Brand said, again explaining the statistics agency’s data.
Source: Repubblica