Germany's economy shrank by 0.2 per cent in the fourth quarter compared with the previous three-month period, official figures showed Monday. The performance by Europe's biggest economy was worse than expected.
Gross domestic product shrank for the first time since the first quarter of 2021 largely because of a decline in consumer spending, which had supported the economy in the first nine months of 2022, the Federal Statistical Office said. The drop followed GDP growth of 0.5 per cent in the third quarter and 0.1 per cent in the second quarter.
The statistics office said in mid-January, before it had full December economic data, that the economy appeared to have stagnated in the fourth quarter. Monday's announcement prompted it to revise last year's full-year growth figure down to 1.8 per cent from the 1.9 per cent it initially reported.
Germany's annual inflation rate rolled back from a peak of 10.4 per cent in October to 8.6 per cent in December, but galloping prices remain a major headache.
A potential energy crunch following Russia's invasion of Ukraine and the end of its gas supplies to Germany also was a concern last year. But Germany's network regulator said earlier this month that a gas shortage was “increasingly unlikely” this winter.