25 May 2023

Germany’s GDP shrinks to put Europe’s biggest economy into a recession

25 May 2023

The German economy suffered an unexpected dip in the first quarter of the year, formally putting the country into a recession, new figures show.

Germany’s gross domestic product (GDP) fell by 0.3% in the period from January to March, data released on Thursday by the Federal Statistical Office shows.

The figures are a blow to the Germany government, which last month boldly doubled its growth forecast for this year after a feared winter energy crunch failed to materialise.

It said GDP will grow by 0.4% – up from a 0.2% expansion predicted in late January – a forecast that may now need to be revised downwards.

Economists said high inflation hit consumer spending, with prices in April 7.2% higher than a year ago.

GDP reflects the total value of goods and services produced in a country.

Some experts question whether the figure alone is a useful indicator of economic prosperity given that it does not distinguish between types of spending.

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