Germany, Consecutive Contraction for 2 Quarters... "Entering Recession"
The German economy entered a recession, continuing negative growth for two consecutive quarters.
On the 25th (local time), the German Federal Statistical Office and foreign media reported that Germany's first-quarter gross domestic product (GDP) growth rate contracted by -0.3% quarter-on-quarter (preliminary figure). Following a -0.5% contraction in the fourth quarter of last year (final figure), the economy experienced negative growth for two consecutive quarters, entering a technical recession.
The main cause of the negative growth was a 1.2% decline in private consumption in the first quarter. The Statistical Office stated, "Individual households generally refrained from purchases compared to the previous quarter, including groceries and beverages, as well as clothing, footwear, and interior goods," adding, "New car purchases also decreased."
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Government spending also fell by as much as 4.9%. On the other hand, exports increased by 0.9%, and imports decreased by 0.9%, contributing to growth. Earlier, on the 26th of last month, the German government revised its economic growth forecast for this year upward to 0.4%, up 0.2 percentage points from the 0.2% forecast made in January.
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