Gross domestic product is expected to fall by 0.3 percent, according to the Federal Statistical Office on Monday. In 2022, growth had still reached 1.8 percent. For the current year, experts expect slight growth at best, with some even predicting a renewed decline in economic output.

The German economy was slowed down from several sides at once. High inflation dampened the purchasing power of private households, who were therefore reluctant to spend. The European Central Bank (ECB) is combating high inflation with the highest interest rates in its history. The construction industry felt the effects of this in particular: it suffered a slump in demand as the dream of owning their own four walls was dashed for many potential house builders due to expensive financing costs. Exporters, in turn, were hit by the weak global economy. Added to this are political uncertainties - from the Russian war against Ukraine and in the Middle East to the budgetary turbulence in the German government.

The outlook for the new year remains gloomy. "Many companies are unsettled by the unclear funding situation and are holding back on investment plans," said Laura Pagenhardt, economic expert at the German Institute for Economic Research (DIW). "This is likely to be reflected in weak investment figures, especially in the new year." The DIW is forecasting economic growth of 0.6 percent for 2024. Some bank economists are more pessimistic, including Commerzbank chief economist Jörg Krämer: "For 2024, we continue to expect a minus of 0.3 percent".

(Report by Rene Wagner, edited by Reinhard Becker. - If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com)