Data from the German Federal Statistical Office (Destatis), released on Wednesday morning, indicated that the German economy recorded its second consecutive annual contraction, ending 2024 with a shrinkage of 0.2%, which aligns widely with market expectations.
However, the data contradicted the expectations of the European Commission and a group of leading economic institutes in Germany, which had anticipated only a 0.1% contraction in German GDP during 2024, following a 0.3% contraction in Germany's economy in 2023.
In the press release accompanying the data, the head of the German Federal Statistical Office, Ruth Brand, pointed out that cyclical and structural pressures have hindered stronger economic development.
She explained that these pressures include increased competition against German exports in its main markets, rising energy costs, a persistently high interest rate level that puts pressure on economic activity, alongside uncertain economic forecasts.
Furthermore, the German Statistical Office also released an early preliminary reading of GDP for the fourth quarter today, which showed an economic contraction of 0.1%, compared to the previous quarter. The German Statistical Office indicated that the regular preliminary reading of German GDP for the fourth quarter will be released later this month.
