A double-decker bus passes through the skyline of the main banking district in Frankfurt, Germany, November 8, 2023.Reuters/Kai Pfaffenbach/File photo Obtaining license rights
BERLIN, Nov 24 (Reuters) – Germany’s economy contracted slightly in the third quarter compared with the previous three months, data released by the German Statistical Office on Friday showed.
The figures confirmed initial predictions announced in late October that Europe’s largest economy would contract by 0.1%.
“After the weak economic development seen in the first half of 2023, the German economy started the second half of 2023 with a slightly weaker performance,” said Ruth Brand, head of the statistics office.
Germany has been one of Europe’s weakest economies this year, hit by high energy costs, weak global orders and rising interest rates.
Germany’s economy stagnated in the first three months of the year, but grew by 0.1% in the second quarter.
Adjusted gross domestic product (GDP) in the third quarter shrank by 0.4% from a year earlier.
According to the Statistics Bureau, personal consumption expenditure, which accounts for about two-thirds of gross domestic product (GDP), decreased by 0.3% from the previous quarter. It added that government personal consumption spending increased by 0.2% for the first time in more than a year.
A court ruling that blocked the transfer of unspent funds from the pandemic to green investments, leaving a 60 billion euro ($65.44 billion) hole in the government budget, particularly regarding planned investments among industry. created great uncertainty.
“Government austerity measures could lead to a further slowdown in growth,” said Thomas Gitzel, chief economist at VP Bank, adding that “a sudden recovery in consumer spending and investment is unlikely.”
Germany’s economy is likely to contract again in the fourth quarter, with some signs of improvement early next year, the Bundesbank said in its monthly economic report on Monday.
(1 dollar = 0.9168 euro)
Report by Miranda Murray.Editing: Linda Pasquini and Jamie Freed
Our standards: Thomson Reuters Trust Principles.