Large-scale increases in energy prices have affected the winter months, economists said.
The German economy has experienced a technical recession, as it has been shrinking for two quarters in a row. Spiegel writes about this with reference to new data from the Federal Statistical Office.
Germany’s GDP contracted from January to March 2023 by 0.3% compared to the previous quarter. Thus, the state’s economy contracted for the second quarter in a row.
If two quarters in a row are negative, then they speak of a technical recession (this is the stage of the economic cycle in which there is a general decrease in economic activity, – ed.).
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“The oft-used criterion of a technical recession has been met. Huge increases in energy prices have taken their toll in the winter months,” said Joerg Kremer, chief economist at Commerzbank.
German economic growth slowed as a result of the contraction in private consumption, which fell by 1.2% in the first quarter. This may occur, in particular, due to the loss of purchasing power of consumers as a result of high inflation.
In addition, government consumption also decreased – by 4.9%. At the same time, investments, which grew by 3.9%, provided a positive impetus. The German economy is also supported by foreign trade.
A significant increase in the German economy is not yet predicted. The Bundesbank expects at least a moderate increase in the spring.
The elimination of supply bottlenecks, a large backlog of orders and lower energy prices are expected to ensure the recovery of German industry. It should also support exports, especially if the global economy regains some momentum.
The German federal government expects GDP growth of 0.4% in 2023. And next year – for growth of 1.6%. For comparison: in 2022, GDP growth is 1.8%.
It was previously reported that the UK this year will be a country with one of the least efficient economies in the world.
Source: korrespondent
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