Economic Growth in Germany
Surging exports while globalization was at its peak in the mid-2010s propelled strong economic growth in 2014-17. However, rising trade tensions, and supply restraints and soft global goods demand in the wake of the pandemic, have weighed on the economy in more recent years: Germany's economy is expected to have markedly underperformed the G7 average in 2021-23.
Germany recorded an average real GDP growth of 1.2% in the decade to 2022, below the 1.4% average for the Euro Area. In 2022, real GDP growth was 1.8%. For more GDP information, visit our dedicated page.
Germany GDP Chart
Germany GDP Data
|Economic Growth (GDP, ann. var. %)||1.0||1.1||-3.8||3.2||1.8|
|GDP (EUR bn)||3,365||3,474||3,404||3,617||3,877|
|Economic Growth (Nominal GDP, ann. var. %)||3.0||3.2||-2.0||6.3||7.2|
GDP contracts in Q3
The economy contracted 0.1% on a seasonally adjusted quarter-on-quarter basis in Q3, contrasting the second quarter's 0.1% increase. The drop was slightly less sharp than expected by the market but still the worst reading since Q4 2022. On an annual basis, GDP contracted 0.8% in Q3, contrasting the previous period's 0.4% expansion.
In its press release, the statistical office said that private spending was down compared to the prior quarter, while fixed investment in machinery and equipment contributed positively to economic growth. A more detailed breakdown will be released on 24 November.
Our panelists expect the economy to stagnate in Q4, putting it on the brink of recession. The trinity of high interest rates, lethargic external demand and high oil and gas prices continues to weigh on the economy.
Analysts at Fitch Solutions said: “The latest figures included upward revisions to growth in both Q123 (from -0.1% q-o-q to 0.0%) and Q223 (from 0.0% to 0.1%) […]. Given the revisions, alongside our projection for the -0.1% Q323 contraction to be followed by an equal decline in Q423, we have raised our 2023 real GDP growth forecast from -0.3% to -0.1%. Meanwhile, we now forecast 2024 growth of 0.3% (down from 0.4%), based on expectations for more prolonged economic weakness.” Analysts at EIU commented: “The cut-off of Russian gas and subsequent decline in consumer and business confidence, along with monetary tightening, pushed the economy into recession in the winter of 2022/23. Growth will remain sluggish in the remainder of 2023, given still-high inflation, but accelerate from 2024. A poor demographic outlook will become a growing constraint.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects German GDP projections for the next ten years from a panel of 56 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for German GDP.
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