Germany’s economy contracted 0.2% in this year’s second quarter from a year earlier, deepening a recession that began last winter.
Germany is Europe’s largest economy, and any slowdown is expected to have ripple effects across the continent, according to economists.
Germany registered zero economic growth in the second quarter from the first, and its economy shrank by 0.2% from a year ago in the April through June period.
The Q2 results follow an economic contraction of 0.4% in Q4 2022 and a contraction of 0.1% in Q1 of this year.
A recession is typically defined as two consecutive quarters of economic contraction.
Weak consumer spending, lacklustre industrial orders, and a slowdown in China have led to weak economic activity in Germany.
Household consumption showed zero growth in Q2, and government spending rose by only 0.1%. Germany’s exports fell 1.1% in the latest quarter.
Germany’s central bank is forecasting that economic output will remain largely unchanged in the current third quarter of 2023.
Specifically, the Bundesbank says that a resilient labour market and strong wage growth will be overshadowed by weak industrial production and sluggish foreign demand.