Germany’s gross domestic product (GDP) dropped again in 2024 after a disappointing 2023, with economists predicting further decline this year, according to Ntv.
Germany’s economy is likely to have contracted in the final quarter of 2024. GDP also contracted by 0.1 per cent between October and December compared to the previous quarter, the Federal Statistical Office (Statistisches Bundesamt) said. Ruth Brand, head of the agency, explained:
Economic and structural tensions prevented better economic development in 2024.
However, the detailed estimate will be announced on 30 January.
The country’s GDP has already contracted by 0.3 per cent in 2023. Last year’s decline was strongly influenced by “intensified competition for the German export economy in key markets, high energy costs” and “still higher interest rates,” Brand added.
The statistical office attributed the 3-per-cent drop in GDP to lower production in the mechanical engineering and automotive sectors. Meanwhile, production in energy-intensive industries, such as chemicals and metals, remained low.
Analysts attributed the downturn in the construction industry to still-high construction prices and interest rates, which led to fewer homes being built. Investment also fell by 2.8 per cent last year, whereas personal consumption expenditure rose by just 0.3 per cent. Government consumer spending also surged by 2.6 per cent.
German exports fell by 0.8 per cent, whereas imports rose slightly by 0.2 per cent. However, many economists warned that the downturn could continue at the beginning of the year, with Europe’s largest economy recovering only by the end of the year.
