Europe’s largest economy shrank by 0.3 per cent in 2023

Germany’s economy shrank by 0.3 per cent last year, according to figures released this morning by the country’s statistics agency. The figures, which also showed a 0.3 per cent contraction in the final three months of the year, make Germany the only big economy to contract in 2023. This year doesn’t look much better for Chancellor Olaf Scholz, as manufacturers that have long depended on cheap Russian gas and high Chinese demand face high energy costs, high interest rates and falling global demand. The OECD says it expects Germany to grow 0.6 per cent in 2024, the worst among the biggest 20 global economies apart from Argentina. Germany is also facing labour unrest – thousands of tractors are blockading Berlin today to cap a week of nationwide farmers’ protests over cuts to diesel subsidies.