A double-decker bus crosses the skyline with its dominating banking district in Frankfurt, Germany on November 8, 2023. REUTERS/Kai Pfaffenbach/File Photo Obtain licensing rights
BERLIN, Nov 24 (Reuters) – Germany’s economy shrank slightly in the third quarter compared with the previous three months, data from its statistics office showed on Friday.
The figure confirmed a preliminary estimate released at the end of October, which showed Europe’s largest economy shrank by 0.1%.
„After the weak economic growth seen in the first half of 2023, the German economy started with a slight drop in performance in the second half of the year,” said Ruth Brandt, head of the statistics office.
Germany has been one of the weakest economies in Europe this year as higher energy costs, weaker global orders and higher interest rates have taken their toll.
In the second quarter, Germany’s economy grew by 0.1% in the first three months of the year.
Adjusted gross domestic product (GDP) shrank 0.4% year-on-year in the third quarter.
Private consumer spending, which accounts for two-thirds of GDP, was 0.3% lower than in the previous quarter, the Office for Statistics said. Government consumer spending rose 0.2% for the first time in more than a year.
The court ruling, which blocked the transfer of unused funds from the pandemic to green investment and blew a 60 billion euro ($65.44 billion) hole in the government’s budget, led to great uncertainty about the planned investments, especially among industry.
„The government’s austerity measures will lead to a further fall in growth,” said Thomas Kitzel, chief economist at VP Bank, adding that „no sudden increase in private consumption or investment is likely.”
The German economy shrank again in the fourth quarter and will show some signs of improvement early next year, the Bundesbank said in its monthly economic report on Monday.
($1 = 0.9168 euros)
Report by Miranda Murray; Editing by Linda Pascugni and Jamie Freed
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