Germany’s gross domestic product (GDP) in the fourth quarter (Q4) of 2022 declined 0.4 percent on the previous quarter, the Federal Statistical Office (Destatis) said on Friday.
“The German economy markedly lost momentum at the end of the year,” Destatis said in a statement. Early figures had still indicated a milder decline of only 0.2 percent.
Soaring energy prices pushed inflation in Europe’s largest economy above the 10 percent mark at the end of last year, before relief measures started to slow prices again. In January, inflation stabilized at 8.7 percent, according to official figures.
As real wages were falling due to high inflation, private consumption, which had still supported Germany’s economy over the course of last year following the end of the COVID-19 restrictions, declined by 1.0 percent in Q4.
Germany’s economic downturn in Q4 2022 was also marked by lower levels of investment. While construction investment fell by 2.9 percent, investment in equipment, such as machinery, appliances and vehicles, even dropped by 3.6 percent, according to Destatis.
Over the course of three years, the COVID-19 pandemic and the Russia-Ukraine conflict will cost Germany’s economy a total of 595 billion euros (631 billion U.S. dollars) in added value by the end of 2023, according to recent calculations published by the German Economic Institute (IW).
“The extraordinary situation will continue to affect us and weigh on prosperity in the coming months,” IW economist Michael Groemling said. (1 euro = 1.06 U.S. dollar) ■