Robert Besser
03 Feb 2023, 01:01 GMT+10
FRANKFURT, Germany: Data released this week showed that the German economy unexpectedly shrank in the fourth quarter of 2022, indicating that Europe's largest economy could be entering a recession, though less severe than originally predicted.
The federal statistics office said that adjusted gross domestic product (GDP) decreased 0.2 percent quarter-on-quarter in adjusted terms, while in the previous quarter, the German economy grew by 0.5 percent, compared with the previous three months.
A recession, defined as two successive quarters of contraction, has therefore become more likely.
"The winter months are turning out to be difficult, although not quite as difficult as originally expected. The severe crash of the German economy remains absent, but a slight recession is still in the cards," said VP Bank chief economist Thomas Gitzel, as quoted by Reuters.
In the government's annual report released last week, German Economy Minister Robert Habeck said that the economic crisis caused by Russia's invasion of Ukraine was manageable, but the government is remaining cautious due to high energy prices and interest rate increases.
The economic situation should improve from spring onwards, the government said, after revising its GDP forecast for 2023 by predicting growth of 0.2 percent, up from a forecast in autumn of a 0.4 percent fall.
Declining private consumption was the primary reason for the decrease in fourth-quarter GDP, this week's figures showed.
"Consumers are not immune to an erosion of their purchasing power due to record high inflation," noted Commerzbank chief economist Joerg Kraemer, according to Reuters.
Get a daily dose of The US News news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to The US News.
More InformationHANOI, Vietnam: Tensions were again increasing off the coast of Vietnam as Hanoi ordered its navy to shadow a Chinese ...
In Warsaw last February, President Joe Biden condemned the lawless Russian invasion of Ukraine: "The idea that over 100,000 forces ...
TOKYO, Japan: Fears over intensifying Chinese military activity directed towards Taiwan could escalate into war have prompted Japan, the United ...
TEGUCIGALPA, Honduras: After Honduran President Xiomara Castro severed ties with Taiwan in favor of China to gain more investment and ...
NEW YORK, New York - A Manhattan grand jury has indicted Former U.S. President Donald Trump for his role in ...
MEMPHIS, Tennessee: Tennessee authorities are slowly releasing information about a weekend car crash on a freeway that killed six young ...
DUBLIN, Ireland: Bank of Ireland has announced that it has raised fixed mortgage rates following a cumulative 3.5 percent rate ...
NEW YORK, New York - U.S. stocks finished the third quarter with a bang on Friday. Despite a volatile start, ...
CUPERTINO, California: In a move aimed at disrupting the fintech sector dominated by Affirm Holdings and Sweden's Klarna, this week ...
BURBANK, California: Walt Disney has begun its planned lay off of 7,000 staff, which was announced earlier this year.A letter ...
NEW YORK CITY, New York: A study published this week reported that China spent $240 billion between 2008 and 2021 ...
NEW YORK, New York - U.S. stocks posted a decent rally on Thursday with all the major indices making good ...