The German economy shrank slightly in the spring. This is shown by a second estimate from the Federal Statistical Office. There are several reasons for the weakness.
The German economy shrank slightly in the second quarter, partly due to a drop in investment and the crisis in the construction industry. Gross domestic product fell by 0.1 percent compared to the previous quarter, adjusted for price, seasonal and calendar effects, according to the Federal Statistical Office in Wiesbaden. The authority thus confirms an initial estimate from the end of July. Compared to the same quarter last year, economic output rose by 0.3 percent, adjusted for price.
“After the slight increase in the previous quarter, the German economy cooled down again in the spring,” said Ruth Brand, President of the Federal Statistical Office. In the first quarter, gross domestic product rose by 0.2 percent compared to the previous quarter.
According to statisticians, one of the reasons for the economic slowdown was a lack of investment in equipment – primarily in machinery, devices and vehicles. Adjusted for price, seasonal and calendar effects, they fell by 4.1 percent compared to the previous quarter, even more significantly than investments in construction (-2.0 percent).
Foreign trade also lacked impetus: 0.2 percent fewer goods and services were exported in the second quarter than in the first quarter, adjusted for price, seasonal and calendar effects. In contrast, consumer spending by private households and the state as a whole remained stable compared to the previous quarter.
The German economy has been in crisis for some time and developed weaker in the second quarter than in other European countries such as Spain and France. With the negative figures in the second quarter, Germany is at risk of falling back into recession.
The German Bundesbank expects the economic recovery to be further delayed. It expects an economic slowdown, but not a prolonged decline in economic output.
Source: Stern
