Consumers in Germany are spending less. That means Europe’s largest economy is officially in a recession.
Output in Germany dropped 0.3% in the first three months of the year, following a 0.5% contraction at the end of 2022, official data showed Thursday. The Federal Statistical Office downgraded its previous estimate of zero growth in gross domestic product (GDP) compared with the previous quarter. A recession is defined as two consecutive quarters of declining output, according to a report by CNN.
“The persistence of high price increases continued to be a burden on the German economy at the start of the year,” the office said. “This was particularly reflected in household final consumption expenditure, which was down 1.2% in the first quarter of 2023.”
European energy prices were already rising when the conflict in Ukraine ignited in February last year sending them soaring to record highs. Moscow then went on to throttle gas supplies to European countries, prompting Germany to declare an emergency.
In August, Russia closed its Nord Stream 1 pipeline for maintenance and then extended the closure indefinitely. This pipeline was Germany’s largest source of Russian natural gas.
Germany Energy Crisis Worsens: Oil Pipeline Leak Cuts Flow To Germany
Natural gas prices have since tumbled and now stand at levels last seen in late 2021, pointing to easing inflationary pressures on consumers’ pockets. The annual rate of inflation in Germany slowed again in April — the first month of the second quarter — although, at 7.2%, it remained high. –CNN
Claus Vistesen, chief euro-area economist at Pantheon Macroeconomics, said spending by consumers in the first quarter was crimped by “the shock in energy prices.” In a note, Vistesen added: “We think consumers’ spending is now rebounding as inflation eases. We doubt that GDP will continue to fall in coming quarters, but we see no strong recovery either.”
Probability Of A Recession Happening In The Next 12 Months Is The Highest In More Than 40 Years!
It Took 22 Years to Get to This Point
Speaking to author and podcaster Dana Parish, former Centers for Disease Control and Prevention...
The United States just made a decision that could lead to World War 3. The current ruling class...
This article was originally published by Michael Snyder at The Economic Collapse Blog. This...
These warnings from Russia, are likely falling on deaf ears. Moscow has not followed through on...
Commenting Policy:
Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn’t immediately available. We’re not trying to censor you, the system just wants to make sure you’re not a robot posting random spam.
This website thrives because of its community. While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil. Racism, to include any religious affiliation, will not be tolerated on this site, including the disparagement of people in the comments section.
Comments