The German economy unexpectedly shrank in the fourth quarter, data showed on Monday, a sign that Europe's largest economy may be entering a much-predicted recession, though likely a shallower one than originally feared.
Gross domestic product decreased 0.2% quarter on quarter in adjusted terms, the federal statistics office said. A Reuters poll of analysts had forecast the economy would stagnate.
In the previous quarter, the German economy grew by an upwardly revised 0.5% versus the previous three months. A recession - commonly defined as two successive quarters of contraction - has become more likely, as many experts predict the economy will shrink in the first quarter of 2023 as well. "The winter months are turning out to be difficult - although not quite as difficult as originally expected," said VP Bank chief economist Thomas Gitzel.
"The severe crash of the German economy remains absent, but a slight recession is still on the cards."that the economic crisis triggered by the Russian invasion of Ukraine was now manageable, though high energy prices and interest rate rises mean the government remains cautious.
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