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Europe's first economy lived through 2023 flirting with technical recession, but repeatedly avoided it. From October to December, the country's GDP contracted 0.3% in quarter-on-quarter comparison and the same figure was repeated for the entire year. Prior to these figures, Germany accumulated two consecutive quarters of zero growth and experts estimate that in the first three months of the current year, it is possible that the country will fall into recession. The Eurozone, although it stagnated at the end of 2023, also chased away the ghost thanks to the economic growth of countries like Spain and Italy.
Persistent inflation, high energy prices and weak foreign demand dragged Europe's economic powerhouse to close the year in negative terms in terms of GDP.
And in almost all comparisons of Germany's GDP there are red numbers. In the quarter-on-quarter comparison the contraction was 0.3%, but in year-on-year terms it fell to 0.4% according to data from the Federal Statistical Office, Destatis.
If the entire year is reviewed, the result was also 0.3%, a figure that adjusted to prices and the calendar represents -0.1%.
However, despite all these negative numbers, what saved Germany from recession in 2023, unexpectedly, was the fact that in the second and third quarters of the year its growth was zero. These zeros in their GDP avoided increasing the negative scenario at least for last year.
For this year, however, the European country would only need to accumulate another quarter of contraction to consider that its economy fell into recession.
Experts consider that it is “very likely” that this scenario could occur and even believe that this scenario is due to the low levels of production to which developed countries have become accustomed in recent years.
Germany's 2023 economic output was no higher than four years ago. “Lack of growth is fashionable in this country”said Alexander Krüger, economist at Hauck Aufhaeuser Lampe.
Meanwhile, the hope remains that inflation will subside, and consequently, the monetary policy of the European Central Bank will relax and interest rates will ease some pressure on the Germans' pockets.
“This will then give European monetary authorities room to maneuver to cut interest rates. This will benefit businesses and consumers, but above all the ailing construction sector,” said Thomas Gitzel of VP Bank.
Spain and France, how positive?
Other major economies in the Eurozone helped this region of countries that share the euro as a currency to moderately stave off the recession.
But although the data contributed to the good reputation of the common area, in particular they were not superior to previous reports. Spain, for example, although it grew 2.5% last year, in reality this represents 3.3 points less than in 2022, a scenario that experts explain was due to resistance to consumption and the reduction in exports under a international context of uncertainty.
The figure for France was much lower and its GDP expanded by only 0.9% in all of 2023, a figure that if compared with the modest 2.5% in 2022 or the solid 6.4% in 2021 tends to overshadow the fact that the 2023 data was 'positive'.
With EFE
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