German gross domestic product contracted in the first quarter of 2023, meaning Europe’s largest economy slid into a mild recession, according to downwardly revised official figures.
The federal statistical agency said the German economy contracted 0.3% in the three months to March, adjusting its initial estimate of zero growth.
A second consecutive quarterly decline in GDP - after a downwardly revised 0.5% contraction in the final quarter of last year - meets the definition of a technical recession.
It looks like #Germany is once again the sick man of Europe. In Q4, the economy contracted by 0.5%, more than in any of the other major economies in the Eurozone, and in Q1 2023, German GDP unexpectedly flatlined while GDP in Italy, Spain & France grew markedly. pic.twitter.com/hJ3N5ysQME
— Holger Zschaepitz (@Schuldensuehner) April 28, 2023
ING Economics noted: "It took a couple of statistical revisions, but now it's official: the just-released second estimate of German 1Q GDP growth came in at -0.3% QoQ."
"The German economy contracted in the last two quarters and is officially in a technical recession," it said.
"It’s not the worst-case scenario of a severe recession but a drop of almost 1% from last summer," ING said.
"The warm winter weather, a rebound in industrial activity, helped by the Chinese reopening and an easing of supply chain frictions, were not enough to get the economy out of the recessionary danger zone."
"Looking beyond the first quarter, the optimism at the start of the year seems to have given way to more of a sense of reality. "
"A drop in purchasing power, thinned-out industrial order books as well as the impact of the most aggressive monetary policy tightening in decades, and the expected slowdown of the US economy all argue in favour of weak economic activity," ING suggested.