Germany, Europe’s largest economy and the world’s fourth-largest, has officially entered a recession. New figures released by the Federal Statistical Office revealed an unexpected dip in the German economy during the first quarter of 2022, confirming the country’s slide into recession.
Germany's statistics office on Thursday released data for Europe's largest economy, marking the country's second contraction in as many months.
Key points to keep in mind :
Key points to keep in mind :
* Data from the German statistics office on Thursday showed a downward revision to GDP from zero to -0.3% for the first three months of the year.
* Germany also recorded a 0.5% contraction in the last quarter of 2022.
Germany's gross domestic product (GDP) contracted by 0.3% from January to March. This decline follows a 0.5% drop in the previous quarter of 2022. With two consecutive quarters of negative growth, Germany now meets the technical definition of a recession.
The first quarter contraction in the German economy is part of a larger economic downturn that has been influenced by various factors, including the energy crisis resulting from Russia’s invasion of Ukraine. This crisis has led to a reduction in energy supplies and an increase in inflation. Additionally, household consumption has declined, but there have been positive contributions from trade and rising investments.
According to the statistics office, German households spent a lot less in the first quarter, with final consumption expenditure falling 1.2% over that period, as consumers were reluctant to spend their cash on clothing, furnishing, cars, and so on.
He added that it is unlikely that the German GDP will continue to fall in the coming quarters, “but we see no strong recovery either.”
Franziska Palmas, senior Europe economist at Capital Economics, said: “We expect further weakness from here.”
Overall, the confirmation of Germany’s recession highlights the significant economic obstacles the country faces, requiring careful consideration and strategic measures to stimulate growth and recovery in the coming months.
Concluding, the confirmation of Germany's recession highlights the economic obstacles that would require careful consideration and strategic measures to stimulate growth and recovery in the upcoming time.
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Paromita Bhattacharjee
Bongaigaon Times
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