As reported by the Statistics office Destatis on Wednesday, a shrink of 0.2% was observed in the German economy in 2024, which marked the second consecutive year of decline. According to LSEG data, this downturn aligned with the predictions that were made by economists surveyed by Reuters.
Both the European Commission and several leading economic institutes in Germany had independently anticipated a 0.1% decrease in the GDP of the nation for the year.
Ruth Brand, the president of the German statistics agency, highlighted that cyclical and structural pressures were major warriors to stronger economic growth.
She pointed out that these challenges consist of intensifying competition for German exports in critical markets, soaring energy prices, persistently high interest rates, and an overall uncertain economic landscape.
Destatis indicates that both the manufacturing and construction sectors dealt with difficulties in 2024, while the services sector experienced growth during the same period.
Germany has been tackling the prolonged housing crisis, mainly because of the increased interest rates and rising construction expenses. In addition to this, the key industries especially the automotive sector have been under strain. Carmakers are navigating the shift to electric vehicles while contending with fierce competition from Chinese manufacturers.
Following the data release, a rise of 0.47% was observed by the German stock index DAX at 10:24 a.m. London time, having already begun the day on a positive note. In 2023, the economy had already contracted by 0.3%.
Destatis, on Wednesday also offered an early estimate of the gross domestic product or GDP for the fourth quarter which is based on the information currently available.
The economy experienced a 0.1% decline in the last three months of the year when adjusted for price, seasonal, and calendar variations as compared to the previous quarter. The official reading of Germnay’s GDP for the fourth quarter will be published later this month, as it was noted by Destatis.
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