The European locomotive, Germany, is already on the verge of recession, after its GDP contracted by 0.2% between October and December in relation to the previous quarter, hit by the war in Ukraine and the acceleration that this has caused in the energy prices. The German economy came from advancing 0.5% in the third quarter when, like the rest of the large economies in the Eurozone, it began to notice the slowdown. In the whole of the year, activity grew by 1.8%, one tenth less than what its statistical office had calculated.
As reported by the Federal Statistical Office (Destatis), “after the German economy achieved a good performance despite difficult conditions in the first three quarters, economic performance slightly decreased in the fourth quarter of 2022.”
Specifically, the statistical office of the largest European economy by size points out that consumer spending by families and companies, which had supported the German economy between the months of January and September, was lower than in the previous quarter . If the comparison is made in year-on-year terms (in relation to the fourth quarter of 2021), German GDP barely advanced 0.5% in price-adjusted data and 1.1% adjusted for price and calendar.
One reason for the difference between these numbers and the non-calendar adjusted value is that the number of working days available in the fourth quarter of 2022 was an average of 1.2 days lower than in the same quarter of the prior year, according to Destatis has pointed out. Likewise, in 2022 as a whole, GDP growth was 1.8% in figures adjusted for prices and 1.9% after adjusting for prices and calendar effects.
The German data has been made public after the National Institute of Statistics published last week its progress data on the Spanish economy. Spanish GDP advanced a slight 0.2% in the fourth quarter in relation to the previous quarter, while it grew 2.7% in year-on-year terms. In the year as a whole, both consumption and investment withstood the onslaught of the inflationary crisis and activity increased by 5.5% for the second consecutive year.
As in the national case, the main economy of the Eurozone is trying to weather the effects of historically high inflation. Germany’s CPI barely moderated to 8.6% in December and closed last year with an average of 7.9%. The German year-on-year inflation rate stood at the lowest level for the month since last August, after the 10% registered in November, according to Destatis.
