German economy enters recession as GDP falls for second straight quarter

Europe's largest economy Germany has contracted in the first quarter of 2023 compared with the previous three months. Data from Germany's Federal Statistical Office has shown that the country has entered recession.

The Gross Domestic Product of the country has fallen by 0.3% in the period from January to March. During the last quarter of 2022, the GDP slipped by 0.5%. This, after Germany faced an energy crisis due to the Russia-Ukraine war. Decline in two consecutive quarters makes it a technical recession.

As per Reuters, household consumption was down 1.2% quarter-on-quarter after price, seasonal and calendar adjustments. Government spending also decreased significantly by 4.9% on the quarter.

The federal statistics agency of Germany has revised the initial GDP figure from 0% to negative this quarter. The recession, however, was less severe than early predictions that were made at the start of the conflict. But the mild winter season and the easing of supply chain problems did not help much in preventing recession.

However, the investments in Germany was up in the last three months of the year, after a weak second half of 2022.