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The German economy shrank by 0.1 percent in the third quarter - but a slight recovery is expected.
According to a report from www.sueddeutsche.de, the German economy shrank by 0.1 percent in the third quarter, as the Federal Statistical Office announced in a flash estimate. The economists surveyed by the Reuters news agency had even expected a decline of 0.3 percent. According to revised figures, there was slight growth of 0.1 percent in the spring, although there was initially talk of stagnation. The causes of the shrinking gross domestic product are high interest rates, strong price increases and the weak global economy. Despite the economic downturn, there are also positive signals. The barometer for the Ifo business climate was in October for the first time since...
The German economy shrank by 0.1 percent in the third quarter - but a slight recovery is expected.
According to a report from www.sueddeutsche.de, the German economy shrank by 0.1 percent in the third quarter, as the Federal Statistical Office announced in a flash estimate. The economists surveyed by the Reuters news agency had even expected a decline of 0.3 percent. According to revised figures, there was slight growth of 0.1 percent in the spring, although there was initially talk of stagnation. The causes of the shrinking gross domestic product are high interest rates, strong price increases and the weak global economy.
Despite the economic downturn, there are also positive signals. The Ifo business climate barometer rose in October for the first time in half a year, suggesting that the worst phase may be over. According to Ifo economic expert Klaus Wohlrabe, GDP could grow slightly again in the fourth quarter and reach around 0.2 percent compared to the summer quarter.
The federal government has lowered its economic forecast for 2023 as a whole and now expects gross domestic product to shrink by 0.4 percent. Germany is therefore likely to be the only large industrial nation to record no growth this year.
However, some economists are more optimistic. Chief economist Alexander Krüger from Hauck Aufhäuser Lamp Privatbank thinks that the situation at least looks less bleak. LBBW economist Jens-Oliver Niklasch also assumes that the balance sheet in the fourth quarter will be similar. Only then can you be a little more confident. According to KfW chief economist Fritzi Köhler-Geib, things will pick up again next year thanks to falling inflation and rising incomes, primarily through consumption. The government forecasts growth rates of 1.3 and 1.5 percent for 2024 and 2025, compared to 1.8 percent in 2022.
The effects of the shrinking gross domestic product on the market and the financial sector could be diverse. Companies may become more cautious about investing and hiring, which could lead to lower demand for loans. Banks could also be more cautious when granting loans and impose stricter creditworthiness requirements on borrowers. This could make lending more difficult and impact economic growth.
In addition, lower growth rates could result in lower demand for certain products and services, which could impact certain sectors of the economy. On the other hand, measures to stimulate the economy, such as lower interest rates or stimulus programs, could be taken to boost growth.
Overall, the situation in the German economy is currently challenging, but there are signs of a possible recovery in the coming quarters. The exact development will depend on various factors, including political decisions, global economic trends and the successful control of the pandemic. It remains to be seen whether and to what extent gross domestic product will recover in the next few quarters.
Source: According to a report from www.sueddeutsche.de
Read the source article at www.sueddeutsche.de