German Economy Slides into Recession Amidst Reduced Consumer Spending

The German economy slid into a technical recession in the first quarter of this year, triggered by a significant decrease in consumer spending. Data from Germany’s Statistics Office, released on Thursday, indicated a 0.3% contraction in GDP (gross domestic product) for the year’s opening quarter, a downturn from the initially reported zero growth.

This development follows a 0.5% shrinkage of the German economy in the final quarter of 2022, marking the second successive quarter of negative growth – a situation typically defined as a technical recession.

The Statistics Office highlighted that German households markedly curtailed their spending in the first quarter. Over this period, final consumption expenditure witnessed a 1.2% drop as consumers showed a reluctance towards expenditures on items such as clothing, furnishings, and vehicles among others.

Despite the recession, representatives on the European Central Bank Governing Council maintain that it’s crucial for the ECB to persist in hiking interest rates to steer inflation back towards its desired target.





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