Economy
German economy shrinks in the second quarter
The economy among European neighbors is growing. Only Germany has a minus, show data from the Federal Statistical Office. There are some reasons for this.
The German economy has shrunk in the second quarter. From April to June, the gross domestic product fell by 0.1 percent to the previous quarter, as the Federal Statistical Office announced on Wednesday for its first estimate. Economists surveyed by the Reuters news agency had expected a minus of this height. In the first three months of the year, it was still a growth of 0.3 (previously: 0.4) percent. In the spring, investments in equipment and buildings dropped. “The private and state consumption editions rose against it,” it said.
Other large euro countries performed much better in spring. France, the second largest economy in the monetary union after Germany, achieved an increase of 0.3 percent. Spain even got an increase of 0.7 percent.
German economy continues to have many construction sites
The German economy is facing a difficult second half of the year. The IFO business climate index-the most important German economic barometer-rose in July for the fifth month in a row. However, it remains at a comparatively low level. “The upswing of the German economy remains bloodless,” said IFO President Clemens Fuest. For the current year, the Munich researchers predict only growth of 0.3 percent. Europe’s largest economy had shrunk slightly both in 2023 and 2024.
The tariffs of 15 percent for exports of goods from the European Union to the United States, which apply on August 1st, are likely to burden the German economy. Before US President Donald Trump took office in January, the average sentence was only about 2.5 percent. The United States are the largest buyer of goods “made in Germany”: in 2024 the German exporters implemented more than 161 billion euros there. In addition, the euro has upgraded a lot since the beginning of the year. German goods in other currency areas.
There is also no consumer boom in sight. The consumers recently showed themselves nausea: the consumer climate barometer calculated for August divided by 1.2 to minus 21.5 points, as the institutes GfK and NIM announced on their survey. “The majority still think it is advisable to hold the money back and not use it for larger purchases,” said Nim expert Rolf Bürkl. “From our deeper analyzes we know that a general uncertainty, the need to make for difficult situations and the high prices, especially for food that are central motifs.”
Reuters
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Source: Stern
