German output contracted 0.3 per cent last year as high inflation, rising interest rates and elevated energy costs weighed on Europe’s largest economy, according to an initial estimate released on Monday.
The federal statistics office, Destatis, said gross domestic product was still above pre-pandemic levels, after last year’s contraction followed two years of rebounding output and left it 0.7 per cent up from 2019.
“Overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises”, said Ruth Brand at Destatis.
German retail sales, exports and industrial production all fell last year. Households were hit by a surge in the cost of living while the manufacturing sector suffered from high energy costs, weak global demand and high interest rates.