Germany’s economy contracts 0.3% during 2023

Germany’s economy shrank 0.3% in 2023, the Federal Statistical Office said on Monday, following a revised down 1.8% expansion in the previous year.

The latest figure came in line with market consensus.

Persistently high inflation coupled with rising interest rates throughout the year weighed on economic activity and demand – both domestically and abroad.

Output in Germany’s industrial segment decreased 2% in 2023, dragged down by considerably lower production in the energy supply sector.

The country’s manufacturing production shrank 0.4% over the past year, as a result of sharp declines in the automotive industry and other vehicle construction.

Meanwhile, services sector growth cooled, as all major segments registered a slowdown. Output in information and communication grew 2.6% last year, following a 5% growth in 2022, while business services grew 0.3%, after a 2.6% growth in 2022.

The Euro was last inching up 0.07% on the day against the US Dollar, with the EUR/USD currency pair trading at 1.0956.