Germany is looking towards technical recession after confirming the 0.1% contraction of GDP in the third quarter

MADRID, 24 Nov. (EUROPA PRESS) -

Germany's gross domestic product (GDP) recorded a contraction of 0.1% between July and September, leaving the largest European economy on the verge of technical recession, as confirmed this Friday by the Federal Statistical Office (Destatis). .

The contraction of Germany's activity in the third quarter implied a slowdown compared to the 0.1% expansion observed in the second quarter and compared to the stagnation in the first three months of 2023, whose reading has been revised downward by one tenth by Destatis.

Compared to the third quarter of last year, Germany's GDP contracted 0.8%, while in data adjusted for prices and calendar the drop in activity was limited to 0.4%, since there was one less working day than in the same period of 2022.

"Following the weak economic development seen in the first half of 2023, the German economy began the second half of the year with a slight decline in performance," said Ruth Brand, president of the Federal Statistical Office.

Between July and September, final consumption spending as a whole remained around the same level as the previous quarter (-0.1%) after adjusting for prices and seasonal and calendar variations. Positive contributions came from gross fixed capital formation.

For its part, foreign trade decreased in the third quarter of 2023 on a price, calendar and seasonally adjusted basis. Specifically, exports of goods and services fell by 0.8% compared to the second quarter of 2023 and imports decreased by 1.3%.

In its latest monthly bulletin, the Bundesbank warned that Germany's economy will not grow again until the turn of the year, when the German central bank only expects a timid recovery in activity.

"Only a slight recovery is expected after the turn of the year," the institution stated, as the German economy continues to go through difficult economic conditions, after registering a GDP contraction of 0.1% in the third quarter.

Likewise, the German statistical office has highlighted that approximately 46 million employed people were registered in the country in the third quarter, which represented an increase of 337,000 people, or 0.7%, compared to the third quarter of 2022.

However, with an advance of 0.3% without seasonally adjusting, Destatis indicated that the usual autumn rebound compared to the previous quarter was somewhat less than that observed in 2022, although the number of employed people reached a new historical high.

For its part, the average number of hours worked per employee decreased by 0.7% compared to the third quarter of 2022 due in part to the calendar effect, since there was one less working day than a year before, and to the reduction of overtime and a higher rate of part-time employment.

In turn, global labor productivity (GDP adjusted based on prices per hour worked by employed persons) fell 0.8% compared to the same quarter of the previous year, according to provisional calculations, while labor productivity per employed person It was 1.6% lower in interannual data.