The Gross Domestic Product (GDP) of the ‘European locomotive’, Germany, stagnated during the second quarter of the year compared to the previous quarter, at which time it contracted 0.1%. This is reflected in the final data published this Friday by the Federal Statistical Office (Destatis), which confirm the advanced data at the end of last July and which is compiled by Europa Press. Thus, the stagnation of activity in Germany between April and June means that its economy has come out of technical recession (negative for two consecutive quarters) after the decline in GDP registered in the last quarter of 2022 (-0.4 %) and in the first quarter of this year (-0.1%).
“After slight declines in the two previous quarters, the German economy stabilized in the spring,” said Ruth Brand, president of the Federal Statistical Office, on Friday. According to Destatis, after two consecutive quarters, final consumption spending increased by 0.1% in the second quarter compared to the first quarter. German household consumption stagnated in the second quarter after two negative quarters, while public spending increased by 0.1%.
Investment, for its part, also advanced slightly in the second quarter, especially in machinery and equipment (+0.6%), which grew more than investment in construction (+0.2%). Regarding the foreign sector, total exports of goods and services from Germany decreased by 1.1% in the second quarter compared to the previous quarter, while imports stagnated.
The Bundesbank sees GDP as likely to remain stagnant
In its monthly bulletin for August, the Bundesbank, the German central bank, warned that Germany’s economy is going through a “phase of weakness” and sees the “European locomotive” likely to remain paralyzed in the third quarter of the year. “Economic Production Is Expected To Stagnate More Or Less In The Third Quarter”, The Institution Collects In Its Bulletin, Where It Considers It Probable That The Economic Activity Of Germany Remains Virtually Unchanged Again Between The Months Of July And September.
In this sense, the German central bank points out that, although the strength of employment and the strong growth of wages, as well as the decrease in inflation, will promote the recovery of private consumption and, therefore, of the service sector, It looks like industrial production will remain weak as foreign demand has been on a downward trend.
