According to data released by the German statistics office Destatis on Friday, the country’s gross domestic product (GDP) stagnated in the fourth quarter of 2022, growing by 1.9% over the year. However, this growth rate was slower than the 2.6% expansion seen in 2021, as the economy faced several challenges in 2022, including a severe energy crisis resulting from the war in Ukraine, high inflation, increasing borrowing costs, supply constraints, and a shortage of skilled workers.
The figures indicate that Germany may postpone a recession for now; however, it is still unlikely to avoid it. The annual GDP for 2022 exceeded forecasts of 1.8% growth and is 0.7% higher than in 2019, prior to the outbreak of the COVID-19 pandemic.
Despite the challenges, private consumption was the primary driver of growth, increasing by 4.6%, while fixed investment and public spending saw smaller increases of 0.2% and 1.1%, respectively. Additionally, net external demand negatively impacted the GDP, as imports rose more than exports. In terms of industries, the service sector led the expansion, while the manufacturing sector stagnated, and the construction sector contracted for a second consecutive year.
Europe’s biggest economy releases a preliminary full-year GDP figure before full December economic data is available, and an official fourth-quarter number isn’t due for a few weeks.
Inflation eased for a second month in a row in December due to falling energy prices and a one-off government off payment of household energy bills, with EU-harmonized consumer prices rising 9.6% year-on-year. There is good probability that inflation had peaked as global energy prices have been falling over the past nine months.
But substantial government interventions and a mild European winter have cushioned the blow and allayed fears of a major downturn. Thanks to the improved supply of energy, the outlook in December is much better than it was in October.
Wholesale price inflation in Germany rose to 12.8% year-on-year in December 2022, the softest rise since August 2021, following a 14.9% gain in November. Wholesale price growth peaked in April, with a 23.8% year-on-year increase.
The main focus this week is likely to be on the German CPI data for December and ZEW survey of economic sentiment for January, both released on Tuesday. Annual CPI data is expected to remain unchanged from the prior month reading of 8.6%, while the ZEW economic sentiment is expected to show an improvement to -15.5 from -23.3 in December.
The German benchmark index has been rallying for two straight weeks gaining more than 8% since the onset of the year. The index has started the week on a positive note, trading above 15,140 for the first time since mid-February, helped by hopes that the worst of the global price squeeze is over and optimism about China’s re-opening.
Investors should be vigilant as the leading RSI has reached overbought levels after the rapid rally over the past two weeks and a technical counter-reaction would not be surprising. From current levels a decline to 14,700 in the short-term appears to be on the cards.
Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.