Germany’s economy is officially in recession, according to first-quarter growth data released by the Federal Statistical Office on Thursday. File photo by Hayoung Jeon/EPA-EPE
May 25 (UPI) — Germany’s economy shrank for a second straight quarter between January and March, meaning the world’s fourth-largest economy officially meets one definition of a recession, data released Thursday by the country’s main statistics agency showed.
According to the latest economic report, gross domestic product unexpectedly fell 0.3 percent in the first quarter, down from 0.5 percent. fall in 2022 from DestatisFederal Statistics Office, which said economic results were affected by the impact of high prices on consumer spending and sharp government cuts.
“After 2022 GDP growth reached negative territory at the end of the year, the German economy has now recorded two negative quarters in a row,” said Ruth Brand, president of Destatis, who as recently as last month predicted first-quarter growth would be flat, avoiding a recession.
An adjusted 1.2% drop in household spending in the quarter, weighed down by the burden of continued high prices, weighed on the economy as people cut spending on food and drink, clothing and footwear and furniture compared to October-December.
Sales of new cars also fell, but the statistics office said the fall was partly due to changes in subsidies for the purchase of green vehicles at the start of the year, when support for plug-in hybrids was cut and the subsidy for electric cars was cut.
Compared to the previous quarter, government spending fell by 4.9 percent, but the decline was largely due to the phasing out of state-funded funds. COVID 19 in 2022 at the beginning a record high was reached in efforts to combat the Omicron wave.
But investment rebounded after a weak second half of 2022. in the first half of the year, driven by gross fixed capital formation in construction, which grew by 3.9 percent compared to the fourth quarter, and machinery and equipment by 3.2 percent.
Plastics and metal products helped increase exports of goods and services by 0.4% compared to October-December. quarter, while imports fell by nearly 1%, partly due to lower imports of crude oil and mineral oil products and chemicals and chemical products.
Germany’s economic stagnation is also weighing on the eurozone bloc, which it heads with the 20-member group. grows only 0.1 percent. in the first quarter, even as its other major economies – France, Italy and Spain – recovered from 2022. of the fourth quarter.
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