FRANKFURT (AFP) – The German economy shrank by 0.1 per cent in the second quarter, final data confirmed yesterday, weighed down by sluggish private consumption and a drop in industrial investments.
“After the slight increase in the previous quarter, the German economy slowed down again in spring,” said head of federal statistics agency Destatis Ruth Brand.
The quarter-on-quarter contraction confirmed an initial estimate released by Destatis at the end of July, which surprised analysts who had been expecting a small uptick in growth in Europe’s largest economy. The April-to-June period noticeably saw a 4.1-per-cent plunge in investments in machinery and equipment, and a two-per-cent fall in investments in construction.
Household consumption was down 0.2 per cent on the previous quarter, as were exports amid weak foreign trade.
Germany, traditionally a driver of European growth, was the only major advanced economy to shrink in 2023 as it battled high inflation, an industrial slowdown and cooling export demand. A recovery was initially expected to get under way at the start of 2024, but a string of disappointing data in recent months has suggested the rebound will take longer than initially thought.
