Germany’s GDP in the fourth quarter of 2024 decreased by 0.2 percent compared to the previous quarter, both in real and in nominal terms, according to the Federal Statistical Office (Destatis). This confirms the initial estimate published on January 30.
For the entire year of 2024, the latest calculations have confirmed a 0.2 percent decline in economic output compared to the previous year, in real and in nominal terms.
In the fourth quarter of 2024, the export of goods and services decreased significantly, by 2.2 percent, compared to the previous quarter. This is the largest decline in exports since the second quarter of 2020. The decline in exports was mainly due to a 3.4 percent decrease in the export of goods. In contrast, the import of goods and services increased by 0.5 percent, with a significant increase in the import of services, by 4.2 percent.
Investments showed a mixed picture in the fourth quarter of 2024. Investments in equipment, mainly in machines, devices and vehicles, decreased by 0.3 percent, the fifth consecutive decline. On the other hand, construction investments increased by 1.0 percent, driven by the mild weather. Gross fixed capital formation, in total, was 0.4 percent higher than in the previous quarter. Consumer spending also increased, by 0.2 percent, with the state’s consumption increasing by 0.4 percent, more than private consumption, which rose by 0.1 percent.
The real gross value added in the fourth quarter of 2024 decreased by 0.3 percent compared to the previous quarter. The manufacturing sector, in particular, saw a decline, by 0.6 percent, the seventh consecutive decline. The production of metal products and electrical equipment, however, increased.
Outside of the manufacturing sector, the real gross value added of the financial and insurance services sector decreased significantly, by 2.1 percent, while the sector of other services, including business services and miscellaneous services, also decreased, by 0.3 percent.
The development of the economy was divided in the fourth quarter of 2024. The trade sector, including commerce, transportation and the hospitality industry, showed a 0.5 percent increase, while the public sector, education, health and social services, showed a 0.3 percent increase.
The real GDP in the fourth quarter of 2024 was 1.6 percent lower than in the same quarter of the previous year. The development in the manufacturing sector and the service sector was very different. While the service sector as a whole showed a 0.4 percent increase, the manufacturing sector saw a 3.5 percent decline. The construction sector, in particular, saw a 3.9 percent decline, but the civil engineering sector showed a significant increase.
Within the service sector, the public sector, education, health and social services, in particular, showed a 2.5 percent increase, while the information and communication sector showed a 1.9 percent increase and the other services sector showed a 0.3 percent increase. The financial and insurance services sector, on the other hand, showed a 2.5 percent decline and the business services sector showed a 1.1 percent decline.
According to preliminary calculations, the average monthly working hours per employee increased by 0.8 percent and the total working hours in the economy increased by 0.7 percent. The labor productivity, measured as the real GDP per working hour, decreased by 1.1 percent, while the real GDP per employee decreased by 0.4 percent.
The private consumption in nominal terms increased by 2.7 percent and the disposable income increased by 3.6 percent, leading to a savings rate of 10.6 percent, higher than the previous year’s 9.9 percent.
In other major EU countries and in the EU as a whole, the economy also cooled down in the fourth quarter of 2024. While Spain and the EU as a whole showed an increase of 0.8 percent and 0.2 percent, respectively, Italy’s economy stagnated and France’s economy decreased by 0.1 percent, similar to Germany’s 0.2 percent decline. The US economy, on the other hand, increased by 0.6 percent in the fourth quarter of 2024 and by 2.5 percent compared to the same quarter of the previous year, stronger than in many European countries. Germany’s economy, in nominal terms, was 2.1 percent lower than in the same quarter of the previous year, below the EU’s 1.1 percent increase.