Germany enters an economic recession

The European Commission said that Germany is entering a state of economic recession, as it expected Germany's gross domestic product to contract by 0.4% in 2023 compared to the previously expected growth of 0.2%. The Commission explained that while weak external demand affects exports, it is expected that net exports will contribute Positive growth in 2023 due to lower imports.

The Commission expected that the GDP would recover by 1.1% in 2024, driven by a recovery in consumption, which is less than the 1.4% expected in the spring, due to the slowdown in the construction sector and less dynamic growth in exports.

Headline inflation in Germany is expected to decline in 2023 to 6.4% from 8.7% the previous year. The Commission said that in the first half of 2023, energy and services price inflation fell more than expected. However, services inflation is expected to remain high with Rising wages .

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