The German economy shrank by 0.3% in 2023

According to data released on Monday by the Federal Statistics Office, the German economy shrunk by 0.3% in the fourth quarter of 2023 and by the same amount for the entire year.

Ruth Brand, the office's head, stated on Monday in Berlin that "overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises."

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

After the revision by the statistics office, the largest economy in the eurozone shrank in the third quarter as compared to the preceding three months.

Generally speaking, two consecutive quarters of contraction indicate a recession. The German economy avoided going into recession as a result of the third quarter's standstill.

(Sources: investing.com, reuters.com)