Driving force of the European economy in the 2010s, Germany is now in the grip of a worrying anemia. In 2023, its gross domestic product (GDP) contracted by 0.3%, the German Statistical Office (Destatis) announced on Monday January 15 during a press conference. Although the decline may seem slight, the euro zone’s largest economy is in reality threatened with stalling. In fact, it displays a performance much lower than that of the great powers. Since 2019, its GDP has only grown by 0.7%, compared to 4% for the European Union, 7.5% for the United States and 20.1% for China, Destatis noted.
“The general development of the German economy has stalled, in an environment still marked by crises”, declared Ruth Brand, president of the office. Germany, driven so far by its industry and exports, is suffering from a cocktail of deleterious effects. Despite a recent decline, high prices in all sectors, particularly in energy, have dampened the economy. Added to this was the deterioration of financing conditions linked to high interest rates. The slowdown in demand, both abroad and domestically, did the rest.
The most impressive decline concerns industry, which accounts for around a quarter of wealth creation across the Rhine. Excluding construction, production of manufactured goods fell by 2% in 2023, mainly due to weak energy production and the contraction of energy-intensive industries for the second year in a row. The decline in energy prices has not allowed these specialties, mainly chemicals and steel, to compensate for the losses incurred since the start of 2022. Their production remains lower by almost 20% compared to their 2021 level, leaving augur lasting job losses in these traditional “made in Germany” sectors.
The decline in household consumption (-0.8% over one year and -1.5% since 2019) is just as striking. High inflation, averaging 5.9% over the year 2023, is the main cause of this decline, undoubtedly reinforced by the lack of confidence in the future, despite low unemployment. However, the German state has also reduced its scope: Destatis observes that, for the first time in twenty years, public spending has decreased by 1.7% in 2023, due to the cessation of restrictive measures. fight against the Covid-19 pandemic.
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