In the first quarter of 2023, too, the high inflation rates continue to weigh on consumer activity due to a significant drop in purchasing power and sharply increased financing costs. This has led to consumers saving on non-essential goods such as clothing, also having a major impact on online retailers across Europe. Goods and services inflation has risen steadily to its peak of 7.6% in February 2023. Retail sales fell by 15%-20% in the first quarter, although the slump was even milder than commonly expected.

At the same time, the industrial economy is showing the first signs of recovery, which is being supported by the reduction in supply bottlenecks in pre-production and sharply falling energy prices. Economic output in Germany is currently expected to decrease by 0.2% in the first quarter of 2023 compared to the previous quarter, but is likely to be 7% higher than in the first quarter of 2022.

The annual outlook for the German economy has been adjusted again due to the developments in the first quarter of 2023. Thus, the inflation rate is expected to be around 6.2% in 2023, which is only slightly lower than last year. In addition, it is forecast that the price-adjusted gross domestic product will fall marginally (-0.1%), after a slight increase was predicted for 2022. Nevertheless, many service providers and retailers are optimistic that sales will recover over the course of the year.

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