Germany's GDP shrank by 0.2% in the fourth quarter of 2022.

(Reuters)

[Financial Channel/Comprehensive Report] The German Minister of Economy recently stated that although the Russian-Ukrainian war caused a surge in energy, the economic crisis caused by it is still within the controllable range, but the latest data released by the German Federal Statistical Office shows that the German economy ranked fourth It unexpectedly shrank by 0.2% in the quarter, which economists believe may mean that Germany's economy is entering a mild recession.

"Reuters" reported that the German government had previously expected that the German economy should start to improve from this spring, and recently raised its 2023 GDP forecast from negative growth of 0.4% to a slight increase of 0.2%.

Unexpectedly, Germany’s GDP unexpectedly contracted by 0.2% in Q4 last year, which was worse than the zero growth expected by the market, indicating that the German economy may be more impacted by the surge in energy than expected.

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This is also the first time that Germany has shrunk since Q1 in 2021, mainly due to inflation dragging down private spending. Prior to this, GDP in the third and second quarters of 2022 grew by 0.5% and 0.1%, respectively.

Even though inflation data in Europe and the United States has cooled slightly, food and energy prices in the euro zone are still high. It is expected that the European Central Bank will raise interest rates by another 2 yards this week. However, even if the monetary policy continues to tighten, it has not yet seen significant results. "Reuters" analysts predict that in January, EU inflation may hit double digits to 10%.

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