German economy plunges into recession in Q1

ANKARA

The German economy contracted 0.2% year-on-year in the first quarter of 2023, entering a recession, official data showed on Thursday.

According to the Federal Statistical Office (Destatis), Germany’s gross domestic product also declined by 0.3% on a quarterly basis.

With these figures, the country’s economy posted two consecutive declines in the last quarter of 2022 and the first quarter of 2023.

Achim Wambach, the head of ZEW Institute, said last week that the German economy could slip into a recession, “albeit a mild one.”

The GfK research firm also warned earlier that “it is more doubtful that the country (Germany) can avoid a recession.”

Besides GDP figures, Germany’s economic sentiment, retail sales and production activities have also been signaling a possible recession for a while.

Destatis said households spent less on food, beverages, clothing, and furnishing during the January-March period.

“Furthermore, households purchased fewer new cars, which is likely attributable, in part, to the discontinuation of grants for plug-in hybrids and the reduction of grants for electric vehicles at the start of 2023,” it added.

• 2023
• Destatis
• GDP
• Germany
• Q1