Germany nevertheless entered recession last quarter
Germany’s economy contracted in the first quarter of the year by another 0.3% compared to the previous quarter, when the country’s GDP fell by 0.5%.
It is reported Bloomberg with reference to the statistical agency of Germany.
An initial assessment of the German economy last month predicted stagnation.
Thus, despite the fact that the country avoided the worst scenarios that were feared after the beginning of the great war of the Russian Federation against Ukraine, it was still not possible to avoid recession.
The reason is in the key manufacturing sector, where a deepening recession casts doubt on the recovery many expect in the coming quarters.
Industrial weakness has a negative impact on business prospects, in particular, the Ifo institute’s expectations index fell in May for the first time in eight months.
A report from the Bundesbank this week was somewhat optimistic, suggesting that the economy may grow “slightly” in the current quarter as large backlogs, reduced logistics bottlenecks and lower energy costs will have a positive effect on manufacturers.
But demand for goods is falling as consumers, faced with higher inflation, prefer to spend money on leisure and travel. This makes economic growth increasingly uneven.
According to Commerzbank economists, a recession in the second half of the year looks more likely than the recovery that most of their colleagues continue to predict.