Will Germany experience negative economic growth for two consecutive quarters in 2023? (Recession in Germany)
resolved Jan 30

Will Germany experience a recession in 2023?

I will resolve YES if the German economy, measured by price + calendar + seasonally adjusted GDP growth, experiences negative economic growth for two consecutive quarters in 2023.

I will use data from the official German statistics agency. See the (EDIT: second) line of the table here: https://www.destatis.de/DE/Themen/Wirtschaft/Volkswirtschaftliche-Gesamtrechnungen-Inlandsprodukt/Tabellen/bip-bubbles.html

"preisbereinigtes BIP" means price-adjusted GDP

If the website no longer exists at the beginning of 2024, I will find a suitable alternative data source.

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predicted YES

Resolving NO based on this data. Interesting how this went. Do any econ people have takes on whether it would be better to just use the price adjusted numbers instead of the price + calendar + seasonally adjusted numbers for future markets similar to this one?

predicted YES

@MaxG Ouch. What a twist. 😅

@MaxG Can you resolve? Thanks!!!

predicted YES

Once data for Q4 comes out, the numbers for Q3 might also be adjusted. I will resolve this to YES if both the numbers for Q3 and Q4 are negative (or for some reason, they e.g. adjust Q2 numbers to be negative so that Q2 and Q3 are both negative even if Q4 is positive). Are people fine with that?

There is just some chance that the numbers might be adjusted again, e.g. when Q1 2024 data comes out and might change the outcome of this market but I don't want to wait that long to resolve. Anyone disagree?

@MaxG Can this resolve off of the recent update from Jan 15th?

bought Ṁ300 of YES

@SirCryptomind Mhm I think I won't resolve yet but wait for quarterly data to come out.

@MaxG Quarterly data is out, Q3 got adjusted to 0.0, too bad this market is closed lol.

bought Ṁ40 of YES

The current estimate of a 78% probability for a GDP contraction in Q4 2023 might be deemed conservative, given that the annual forecast for Germany's economy necessitates a 0.3% decline in this quarter to align with the expected annual shrinkage of 0.3%. My advise: vote „yes“ as long as this probability is still undervalued :) (disclaimer: I also voted “yes”)

Source: https://economy-finance.ec.europa.eu/economic-surveillance-eu-economies/germany/economic-forecast-germany_en

predicted YES

New data is out. -0.1% for Q3. Now it is a bet on whether Q4 will also see negative growth

@MaxG i think you should change the line "the first line on the lable here" which for me implies the first row. i got a bit confused there.


Compared to the version published on August 25 (as preserved by the Internet Archive here: https://web.archive.org/web/20230907112519/https://www.destatis.de/DE/Themen/Wirtschaft/Volkswirtschaftliche-Gesamtrechnungen-Inlandsprodukt/Tabellen/bip-bubbles.html )

Q1 was adjusted from -0.1% to 0.0%

Q2 was adjusted from 0.0% to +0.1%

(and the lines for per-capita and per-worker figures are completely gone)

So it's also a bet that by the time the Q4 figures are released, Q3 won't be adjusted to 0.0%.

bought Ṁ10 of YES

Several indicators suggest that Germany is on the verge of experiencing a decline in economic growth for the rest of 2023:

·        The Federal Statistical Office (Destatis) reports that GDP growth has sharply slowed down to 0.4% in the second quarter of 2023: a significant drop from the 2.7% growth recorded in the previous quarter.

·        Eurostat's GDP overview and the European Commission's economic forecast for Germany align with this trend, underlining a contraction in key economic sectors - with manufacturing output declining by 1.2% and services by 0.8% - and predicting a meager 0.2% GDP growth for the entire year.

·        Despite Germany's attempt to stimulate the economy through corporate tax cuts, as reported by Deutsche Welle (DW), various economic experts yet express concerns.

·        Even the International Monetary Fund (IMF) acknowledges the challenges in the German economy and forecasts the 2023 Projected Real GDP (% Change) as -0.5%.

With the German economy experiencing stagnation in the 2nd quarter of 2023, the cumulative evidence suggests a sustained period of possibly negative economic growth in 2023.

predicted YES

@kottsiek newer forecasts tend to predict negative growth

bought Ṁ10 of NO

@habakuk Only one of those quarters is in 2023. We'll need to wait at least for the second-quarter figures. (And since DESTATIS has demonstrated that they'll apply corrections afterwards, the first numbers released for the second quarter won't necessarily remain unchanged until 2024.)

predicted YES


Oh, yes. I see. Obviously I was too fast. But I guess it‘s still reasonable to update (a bit).

predicted YES

This is looking increasingly unlikely. The official numbers for Q1 were stagnation (0.0% growth), and almost all the recent forecasts for the whole of 2023 I have seen are projecting slight growth.

Q1 numbers: https://www.destatis.de/DE/Presse/Pressemitteilungen/2023/04/PD23_169_811.html#:~:text=Data%20ranges%20from%2083.53%20to%20108.68.&text=End%20of%20interactive%20chart.&text=Im%20Vorjahresvergleich%20war%20das%20BIP,als%20im%201.%20Quartal%202022.

Recent forecasts: https://www.tagesschau.de/wirtschaft/konjunktur/konjunkturprognose-ts-112.html

bought Ṁ10 of YES

Germany's economy in hot mess
Thanks to Covid's deadly caress
Slumping exports, rising debt stress
A recession looming, oh yes!

predicted NO

New forecast released by the German ministry of economics predicts slight growth in 2023, instead of a recession: https://www.tagesschau.de/wirtschaft/konjunktur/wirtschaftspolitik-perspektive-jahreswirtschaftsbericht-habeck-103.html

Still, growth is projected to be 0.2%, which leaves plenty of room for negative quarters.

bought Ṁ10 of NO
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