German economy shrinks in Q4 ’24

The German economy contracted in both the fourth quarter and the full year of 2024, with the gross domestic product (GDP) falling by 0.2 per cent compared to the previous quarter, the Federal Statistical Office (Destatis) reported on Tuesday, confirming earlier estimates.

Exports fell sharply by 2.2 per cent in Q4, the biggest drop since 2020, while imports rose 0.5 per cent. Investment in machinery and equipment declined for a fifth straight quarter, though construction investment grew. Consumer spending increased slightly, supported by a rise in government expenditure.

Manufacturing output dropped, marking seven consecutive quarters of decline, with sharp contractions in mechanical engineering and automotive production. Construction activity also weakened, while service sectors posted mixed results.

Compared to Q4 2023, GDP fell 0.4 per cent, with investment down 2.7 per cent and exports declining 3.2 per cent. Private consumption edged up 0.3 per cent, while government spending surged 4.0 per cent.

Germany’s economic performance lagged behind the EU’s overall 1.1 per cent growth in 2024, while the US economy expanded by 2.5 per cent year-on-year.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama