# German economy expected to grow modestly in 2023 – European Commission
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-13
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: German Economy Growth Forecast: 0.2% GDP Rise in 2023
Meta Description: Get the latest info on the German economy's growth forecast for 2023, with European Commission projections and analysis of key factors impacting the
URL: https://financedigest.com/german-economy-expected-to-grow-modestly-in-2023-european-commissionhtml

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BERLIN (Reuters) – The German economy will grow slightly this year, the European Commission said Monday, revising upwards its previous forecast for a 0.6% contraction.

In its winter forecasts, the European Commision envisages 0.2% GDP growth for Europe’s biggest economy in 2023, more than it expected in autumn due to the easing of energy prices and policy support to households and firms.

German gross domestic product decreased 0.2% quarter on quarter in adjusted terms in the fourth quarter.

Despite a recent improvement in confidence, the [economy is expected](https://www.financedigest.com/german-economy-expected-to-skirt-recession-economy-ministry-report.html "German economy expected to skirt recession – economy ministry report") to suffer another mild decline in early 2023, as energy prices for households are still increasing and government support for January and February will only be disbursed in March, the Commission said.

[Growth is expected](https://www.financedigest.com/universal-music-q3-earnings-beat-expectations-streaming-growth-slows.html "Universal Music Q3 earnings beat expectations, streaming growth slows") to rebound to 1.3% in 2024, according to the Commission’s forecasts.

German [consumer prices](https://www.financedigest.com/analysis-to-raise-prices-or-not-consumer-goods-makers-weigh-bets-on-buyer-strength.html "Analysis-To raise prices or not? Consumer goods makers weigh bets on buyer strength"), harmonised to compare with other European Union countries, peaked at 11.6% in October, driven by the surge in energy prices and rising input costs. Since then, [consumer prices](https://www.financedigest.com/investors-warn-big-consumer-firms-over-price-hikes-as-competitors-gain.html "Investors warn big consumer firms over price hikes as competitors gain") have eased somewhat.

In 2023, the pass-through of elevated wholesale energy price [growth](https://www.financedigest.com/liverpool-shines-as-one-of-uks-leading-ladies-for-house-price-growth.html "Liverpool shines as one of UK’s leading ladies for house price growth") is expected to be mitigated by the caps on gas and electricity prices.

However, still rising producer costs are [set to keep inflation](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook") high, at a projected 6.3% in 2023, the Commission said. In 2024, German [inflation is expected](https://www.financedigest.com/dollar-drops-as-inflation-cools-more-than-expected.html "Dollar drops as inflation cools more than expected") to de decline to 2.4%.

(Reporting by Maria Martinez, editing by Rachel More, Kirsten Donovan)


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