In the first quarter of 2023, economic growth in Germany has been slightly negative, with the country currently being in an economic recession. Although investments have grown by almost 3%, the country experienced a contraction in private consumption and government spending. As a result, GDP is 0.5% lower than in the first quarter of 2022. During the last year, the strong economic rebound after the pandemic, rising energy prices, and uncertainty related to the Russian invasion of Ukraine have raised the inflation rate, now still at 8.24% relative to the previous year. Unemployment is stable at 3%. The OECD economic outlook expects annual inflation to gradually decline throughout 2023, reaching 3.5% towards the end of the year, and to decrease to 3% until the end of 2024. Despite the current tightening of the monetary policy by the ECB to slow down inflation, GDP in Germany is expected to grow at an average annual rate of 4% until the end of 2024. Unemployment is expected to stabilize at around 2.8% in 2024.

July 2023