# At a glance

![Symbolised image: Price tag with the text ‘+ 6 %’](https://publikationen.bundesbank.de/resource/blob/925122/2f8a1219dd56034971d4d95e5b5ec2c6/472B63F073F071307366337C94F8C870/2023-1-05-preise-data.svg)

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### Increase in consumer prices

Price pressures in Germany weakened in 2023. As measured by the Harmonised Index of Consumer Prices (), the annual average inflation rate was 6%, after consumer prices had risen by 8.7% in 2022. Falling energy prices contributed substantially to this reduction in inflation.

![Symbolic image: Stylised staircase with an arrow pointing upwards](https://publikationen.bundesbank.de/resource/blob/925124/316f4e651953911c596f6db5e6ba0c5c/472B63F073F071307366337C94F8C870/2023-1-06-zinsen-data.svg)

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### Interest rate staircase

The Governing Council raised key interest rates six times in 2023. Between July 2022 and September 2023, it raised interest rates by a total of 4.5 percentage points, its largest interest rate hiking cycle since the introduction of the euro.

![Symbolic image: Stylised graph starting with a rise and ending in a sideways movement](https://publikationen.bundesbank.de/resource/blob/925126/ba6b56b7711a95ed3c45137a815dc612/472B63F073F071307366337C94F8C870/2023-1-07-konjunktur-data.svg)

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### Economy treading water

Last year, high inflation, weak foreign demand and tight monetary policy were a drag on German economic output. Price and calendar-adjusted gross domestic product fell slightly by 0.1%.

![Symbolic image: Stylised balance sheet with a crossed-out lower part](https://publikationen.bundesbank.de/resource/blob/925128/553508c8e4c4788f79d1d860e7f8ec5e/472B63F073F071307366337C94F8C870/2023-1-08-bilanz-data.svg)

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### Balance sheet length

The Eurosystem's balance sheet has contracted by over €1,800 billion, or just over one-fifth, since the beginning of the latest monetary policy tightening cycle. This was mainly attributable to euro area banks, which repaid a large volume of loans from targeted longer-term refinancing operations ().

![Symbolic image: Federal eagle next to a weight with a percentage sign and downward arrow](https://publikationen.bundesbank.de/resource/blob/925130/9cefecff90da7f9515b1e5cf453726ae/472B63F073F071307366337C94F8C870/2023-1-09-finanzen-data.svg)

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### Public finances

Germany's deficit ratio fell from 2.5% to 2% in 2023. The main reason for the decline was the expiry of temporary crisis measures. The debt-to- ratio likewise declined and continued to approach 60%. In its ruling of 15 November, the Federal Constitutional Court strengthened the binding effect of the debt brake.

![Symbolic image: Euro sign next to a stylised circuit on a circuit board](https://publikationen.bundesbank.de/resource/blob/925132/6bb003c5f4177af0257d8d4f5104ba75/472B63F073F071307366337C94F8C870/2023-1-10-euro-data.svg)

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### Digital euro

In November 2023, the Governing Council decided to continue working on the digital euro in a two-year preparation phase.

*[GDP]: gross domestic product
*[ECB]: European Central Bank
*[TLTROs]: targeted longer-term refinancing operations
*[HICP]: Harmonised Index of Consumer Prices