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Friday, June 14, 2024

Germany’s GDP shrinks to put Europe’s biggest economy into a recession

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The German economy suffered an unexpected dip in the first quarter of the year, formally putting the country into a recession, new figures show.

Germany’s gross domestic product (GDP) fell by 0.3 per cent in the period from January to March, data released on Thursday by the Federal Statistical Office shows.

The figures are a blow to the Germany government, which last month boldly doubled its growth forecast for this year after a feared winter energy crunch failed to materialise.

It said GDP will grow by 0.4 per cent – up from a 0.2 per cent expansion predicted in late January – a forecast that may now need to be revised downwards.

Economists said high inflation hit consumer spending, with prices in April 7.2 per cent higher than a year ago.

GDP reflects the total value of goods and services produced in a country.

Some experts question whether the figure alone is a useful indicator of economic prosperity given that it does not distinguish between types of spending.


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