Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Germany tips into recession with analysts warning economy won’t get much better

by May 25, 2023
May 25, 2023
Germany tips into recession with analysts warning economy won’t get much better

Germany slipped into an official recession over the winter, triggered by family finances being crushed by sky high energy bills, official figures out today show.

Revised estimates from the country’s statistics agency, Destatis, revealed gross domestic product (GDP) contracted 0.3 per cent in the first three months of this year.

The organisation previously thought output flatlined over the period.

Today’s downgrade means Germany’s economy has shrunk for two straight quarters, meeting the rule of thumb recession definition. GDP slumped 0.5 per cent in the final quarter of last year.

Consumer spending dropped 1.2 per cent at the beginning of the year, the main factor driving production lower. That was a slight improvement from the 1.7 per cent drop in the final months of 2022.

Germany has been particularly exposed to the energy price shock caused by Russia’s full-scale invasion of Ukraine.

A large chunk of its economic output is generated by its industrial and manufacturing industries, which have for years relied on cheap energy from Russia. Rising gas prices have forced firms to trim activity and households to conserve their cash.

Compounding the energy price shock’s squeeze on the economy has been the European Central Bank’s (ECB) aggressive interest rate rises to tame inflation across the 20-member eurozone.

President Christine Lagarde and the rest of the governing council have sent borrowing costs up to 3.25 per cent from minus 0.5 per cent in under a year. The bloc had negative interest rates for several years.

ECB officials are tipped to raise rates at least one more time this year. Eurozone inflation has slimmed to seven per cent from a peak of nearly 11 per cent. In Germany, the rate of price increases is running at 7.6 per cent.

Analysts warned Europe’s economic powerhouse’s performance won’t get much better as the year progresses.

“Looking ahead, we doubt that GDP will continue to fall in coming quarters, but we see no strong recovery either,” Claus Vistesen, chief eurozone economist at consultancy Pantheon Macroeconomics, said.

“We think consumers’ spending is now rebounding as inflation eases, and the 4.9 per cent crash in government spending will mean-revert too. By contrast, we think investment is now falling, as higher interest rates and tightening credit standards bite, and the surge in net exports also is petering out,” he added.

Earlier this week the International Monetary Fund hiked its forecasts for UK GDP growth this year to 0.4 per cent from a 0.3 per cent contraction. That means Germany is now tipped to be the worst performing economy in the G7 this year.

Read more:
Germany tips into recession with analysts warning economy won’t get much better

0
FacebookTwitterGoogle +Pinterest
previous post
CBI finalises plans for crucial vote on business group’s future
next post
Net migration to UK hits record high of 606,000 as Brexit scales EU movement back

You may also like

Am I the Problem? Five Stages of Reverse...

August 23, 2023

Tata confirms Somerset will host £4bn battery factory

February 28, 2024

Over one million sign petition to strip ex...

January 8, 2024

Banks set to reign in lending as economic...

October 14, 2022

British Business Bank warns of risk of defaults...

September 29, 2022

Energy bills likely to inch higher from April...

December 11, 2024

Starmer targets digital trade deal with Trump as...

February 7, 2025

The Body Shop Announces Closure of Nearly Half...

February 20, 2024

UK businesses turn to temp staff amid recession...

May 10, 2023

We must make Britain the best place to...

June 12, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump’s Debanking Order Calls for Investigation, Something Tennessee Should Have Done

      August 7, 2025
    • $93 million in aid to fight malnutrition headed to 12 African countries, Haiti, State Dept says

      August 7, 2025
    • $93 million in aid to fight malnutrition headed to 12 African countries, Haiti, State Dept says

      August 7, 2025
    • America’s Not-So-Secret Secret Police

      August 7, 2025
    • Poll: Nearly 1 in 4 Americans Think They Have a Personal Social Security Account

      August 7, 2025
    • Republican senator claims RFK Jr. mRNA vaccine decision undermines Trump agenda

      August 7, 2025

    Categories

    • Business (8,704)
    • Investing (2,185)
    • Politics (16,335)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved