Germany slips into recession: The economy submits contraction in two successive quarters
The German economy was in recession in early 2023 as the household spendings in Europe’s economic engine finally succumbed to the pressure of high inflation.
Gross Domestic Product (GDP) fell by 0.3% in the first quarter of the year when adjusted for price and calendar effects, a second estimate from the statistics office showed on Thursday. This was followed by a decline of 0.5% in the fourth quarter of 2022. A recession is commonly defined as two successive quarters of contraction.
The nation’s Finance Minister, Christian Lindner, on Thursday, stated that the German GDP data registered a “surprisingly negative signals.” He added that he does not wish for his country’s economy to be compared to highly developed economies, where they have to relegate themselves to the last positions.
Germany’s economy minister, Robert Habeck, cited that their nation’s previous dependency on Russia for energy supply has led to the recession, however, the growth forecasts were much bleaker. He added that they are fighting their way out of the crisis.
Government spending decreased significantly by 4.9%, on the quarter, and the household consumption was down 1.2% quarter on quarter after price, seasonal and calendar adjustments.