Europe's biggest economy had a rough year: German GDP contracted by 0.3% in 2023, according to official data.
ADVERTISEMENTGermany's full-year GDP growth decreased by 0.3% in 2023, down from a revised 1.8% in 2022, according to new data from the country's Federal Statistical Office.
The figure aligned with gloomy forecasts throughout last year, such as expectations that it would be the only major world economy to shrink in 2023, and marks Germany's first annual economic slump since the COVID pandemic began in 2020.
Once Europe's powerhouse, Germany greatly suffered from persistently high inflation throughout the year, along with mounting interest rates, which took their toll on activity and demand in the country. Weakening international trade due to a slowdown in the world economy has also left the German economy.
In the whole of 2023, the industrial sector output tumbled by 2%, driven by lower production in the energy supply sector. The manufacturing output also dropped, by 0.4% due to declines in the automotive industry.
Despite the high borrowing costs, building activity rose by 0.2%.
The service sector still grew but slower than before, and private consumption dropped by 0.8%, investments shrank by 0.3%, and government spending declined by 1.7%.
Net external demand contributed positively as imports fell more than exports, according to the Federal Statistical Office.
