BERLIN (Reuters) – Germany’s economy contracted more than expected in the last three months of 2022, detailed statistics showed on Friday, with inflation and the energy crisis impacting household consumption and investments.
Gross domestic product fell 0.4% in the fourth quarter of 2022 compared to the previous three months, while preliminary data from the Federal Institute of Statistics indicated a contraction of 0.2% at the end of January.
In the third quarter, Germany recorded economic growth of 0.5%.
Everything indicates that the German economy will contract again in the first quarter, said Carsten Brzeski, global head of macroeconomics at ING, citing the decline in the Ifo index on current business conditions, the index Manufacturing PMI, low consumer confidence and unwillingness to spend.
“Today’s figures show that the sharp rise in energy prices has significantly slowed the economy despite the government’s aid measures,” commented Ralph Solveen, economist at Commerzbank. With the tightening of central bank policies, he believes that we should hardly expect a major economic recovery.
After the end of support measures, notably on fuel and transport, consumers reduced their spending in the fourth quarter, according to Destatis. Private consumption fell by 1.0% while government spending increased by 0.6%.
Investment in construction fell by 2.9% in the fourth quarter, that of companies in machine tools and equipment by 3.6%, both adjusted for inflation and seasonal and calendar effects.
Exports of goods and services were down 1.0 percent from the July-September period, driven by the geopolitical backdrop, continued supply chain disruptions and high energy prices, it added. statistics office.
(Maria Martinez, Laetitia Volga, editing by Kate Entringer)
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