German economy stagnates in Q2 after winter recession
2023.08.25 03:08
© Reuters. FILE PHOTO: A cargo ship is seen on river Main in front of the skyline during a summer evening in Frankfurt, Germany, August 13, 2023. REUTERS/Kai Pfaffenbach
BERLIN (Reuters) -The German economy stagnated in the second quarter compared to the previous three months, following a winter recession, data from the statistics office showed on Friday.
The figure of zero growth for the three months to July was in line with a first estimate published in late July. Year on year, adjusted GDP contracted by 0.2% in the second quarter.
Quarter on quarter, economic activity had fallen by 0.4% in the fourth quarter of 2022 and by 0.1% in the first quarter of 2023. Two consecutive quarters of contraction commonly define a recession.
Household consumption showed zero growth in the second quarter from the first and government spending rose by 0.1%. Capital investment also grew modestly while exports fell 1.1%, Friday’s report showed.
The Bundesbank expects economic output to remain largely unchanged again in the third quarter, according to a monthly report published on Monday.
A resilient labour market, strong wage increases and declining inflation should boost private consumption, but industrial production will remain weak due to sluggish foreign demand, the report said.
