Dhe German economy failed to pick up again in the spring after the chilly economic winter. The gross domestic product (GDP) stagnated in the second quarter compared to the previous quarter, as the Federal Statistical Office announced on Friday in Wiesbaden. The authority confirmed preliminary figures.
The hoped-for spring revival therefore failed to materialize. In the winter months, the German economy shrank for two quarters in a row and thus slipped into a so-called technical recession. “After the slight declines in the two previous quarters, the German economy stabilized in the spring,” said Ruth Brand, President of the authorities.
The still high inflation burdens consumers and dampens consumption. Private consumer spending stagnated in the second quarter. According to economists, the export-oriented German economy is also suffering from weak foreign demand.
lending curbed
Headwind is also coming from the rise in interest rates. These depress demand for construction work and capital goods and slow down lending. According to the Deutsche Bundesbank, there was significantly less demand for housing construction loans to private households in the second quarter.
The Bundesbank assumes that the economy is likely to stagnate in the current summer quarter as well. Many experts even expect a decline in GDP for 2023 as a whole. Data on the purchasing managers’ index recently exacerbated concerns that the sluggish situation in industry could spread even more to service providers.
In addition, the Federal Statistical Office announced that the German state spent significantly more money in the first half of 2023 than it received. Based on the total economic output, the deficit of the federal, state, municipal and social security funds was 2.1 percent according to preliminary figures.
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