The global economy was shaped by the geopolitical tension in financial year 2023/24. It expanded at a similar pace to the previous year (cf. table ‘Development of gross domestic product by METRO region’). The German economy declined slightly. Economic development in many countries of the region West also lost momentum. Overall, the region recorded real economic growth. The countries in the Iberian peninsula enjoyed comparatively high economic growth, even though it was down on the previous year. In the region East, in contrast, growth outpaced the previous year. However, performance in the region varied from country to country. The Russian economy performed significantly more strongly than in the previous year. Its rapid growth is attributable to the war economy, among other factors.
|
2022/231 |
2023/242 |
||||||
---|---|---|---|---|---|---|---|---|
World |
2.6 |
2.7 |
||||||
Germany |
0.0 |
−0.2 |
||||||
West |
1.5 |
1.1 |
||||||
Russia |
1.8 |
4.3 |
||||||
East |
2.4 |
2.7 |
||||||
|
The performance of private consumption in Germany was positive at a low level. Private consumption also grew in the regions West and East, but the pace was down on the previous year. Unlike in the region East, it expanded more slowly than real gross domestic product in the region West. Private consumption was once again absent as a driver of macroeconomic growth for Germany and the region West.
Inflation weakened in the course of the financial year. The inflation rate in Germany and Western Europe was below 3% for the year. The stable decline in inflation prompted the European Central Bank to cut interest rates several times in order to revive the economy. In the region East, which had recorded double-digit inflation rates in all countries in the previous year, the inflation rate retreated to single-digit figures. Exceptions are Turkey and Pakistan, which continue to have very high inflation, despite declines in inflation rates.
Falling energy prices and a slowdown in food price increases have contributed to the decline in inflation in Germany and the regions West and East. In Russia, by contrast, inflation accelerated, driven by the strong economic growth.
In view of the significant decline in inflation, consumer confidence recovered continuously in the countries of the European Union and the Eurozone in the course of the financial year and was most recently only just below the long-term average.
Regardless of economic parameters, sales in the hospitality industry delivered a positive nominal performance, but the rates of growth slowed significantly compared to the previous year. In some countries in Western and Eastern Europe, the hospitality industry nevertheless saw relatively high growth rates for the year as a whole. In Germany, nominal sales development was majorly impacted by the increase in value added tax as of 1 January 2024. As a result, price increases for out-of-home consumption have been markedly higher than food inflation since the beginning of the calendar year. Consequently, Germany’s hospitality industry did not expand in real terms and price-adjusted sales continue to be below pre-pandemic levels.
1 The underlying data was collected as of the closing date on 22 October 2024. The reliability of statistics for Russia is limited because, on the one hand, the effects of the war and the associated sanctions are difficult to assess, even in the past financial year, and, on the other hand, data from the Russian authorities is only released selectively.