Germany Enters Recession

Germany’s economy has entered a recession as it contracted for the second consecutive quarter in the first three months of 2023, according to the country’s statistical office.

The decline in the gross domestic product (GDP) of Europe’s largest economy was 0.3 per cent during the period from January to March, following a 0.5 per cent drop in the previous quarter of 2022. Initially, there were hopes that Germany could avoid a recession, as early estimates suggested zero growth.

However, the federal statistics agency revised the negative growth figure down from the initial estimate. The recession is considered less severe than initially predicted, but factors such as increasing energy prices due to declining supplies from Russia and a drop in household consumption contributed to the economic downturn.

Germany’s inflation rate in April stood at 7.2 per cent, above the euro area average but below that of the UK, which was 8.7 per cent.