The German industrial activity shrinks worse than expected and the Central Bank expects a slight contraction of the economy in 2023 and little growth in 2024
Industrial activity in Germany recorded a contraction worse than expected this December, coinciding with a report issued by the German Central Bank indicating that the country’s economy may contract during the current year.
The German Manufacturing Purchasing Managers’ Index recorded 43.1 in December, compared to expectations that the index would record 43.2.
The German Central Bank said on Friday that its expectations indicate a slight contraction in the country’s economy this year, but it will capture only slight growth next year.
This comes in light of weak demand from abroad, limited government support for the green transition, and economic activity being affected by high interest rates.
Compared with the previous forecast issued in June, the bank’s semi-annual forecasts for Europe’s largest economy showed a slightly smaller contraction than expected in 2023, but it also greatly reduced the size of the expected recovery in 2024.
The German Central Bank said on Friday that its expectations indicate a slight contraction in Germany’s economy this year, but it will seize slight growth over the next year.
This comes in light of weak demand from abroad, limited government support for the green transition, and economic activity being harmed by high interest rates.
Compared with previous forecasts issued in June, the bank’s semi-annual forecasts for Europe’s largest economy showed a slightly smaller contraction than expected in 2023, but it also greatly reduced the size of the expected recovery in 2024, according to Reuters.
The latest forecasts indicate that the German economy will decline by 0.1% in 2023 and achieve growth of 0.4% next year.
