German economy shrinks by 0.3% in Q4, as expected

23rd Feb 2024 07:18

(Sharecast News) - The German economy contracted by 0.3% on the quarter in the fourth quarter, according to data released on Friday by Destatis, in line with the initial estimate and consensus.

On the same quarter a year earlier, GDP shrank by 0.4%.

Ruth Brand, president of the Federal Statistical Office, said: "The German economy ended 2023 in negative territory. In the final quarter, declining investment had a dampening effect on economic activity, while consumption increased slightly."

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "Looking ahead, early survey data for Q1 suggest that the German economy will remain laggard in the Eurozone.

"Granted, base effects are now favourable for a quarter-on-quarter rebound in investment, especially in manufacturing, but we think falling investment in construction will remain a drag. Meanwhile, for consumption, we look for a further tepid rise in spending growth as real income growth improves, but a rising savings rate is a downside risk."