According to the Federal Statistical Office (Destatis), most key sectors of Germany’s economy have faced a decline.
In the third quarter of 2023, the eurozone's largest economy experienced difficulties, namely, a drop in industry. Such a situation could be observed in most key sectors.
In the given period, economic performance in industry, excluding construction, slumped by 3.8% on a yearly basis. The decline could be explained by a reduction in the production of new cars and spare parts for vehicles. The same tendency was recorded in the energy supply sector.
In the third quarter of 2023, the price adjusted gross value added in transport and accommodation services tumbled by 0.4% compared to the same period in 2022. In this light, the country’s exports dropped by 3.8% year-over-year.
Ruth Brand, President of the Federal Statistical Office, said that economic performance was virtually stagnant in the first two quarters of the year. Thus, from January to March 2023, there was zero growth, whereas from April to June, the indicator increased by 0.1%. In other words, the situation has been tense for the third quarter in a row.
“After the weak economic development seen in the first half of 2023, the German economy began the second half of the year with a slight drop in performance,” Ruth Brand said.
For reference, official data on the economic decline met preliminary estimates provided by Destatis. According to experts polled by Bloomberg, the economic contraction could be attributed to a rise in the key rate, a slump in global demand for German products, and higher energy prices in the EU. Under the current conditions, the risk of a recession in the mid-term is quite high.