New figures show the German economy suffered an unexpected dip in the first quarter of this year, putting the country formally into recession. Data released Thursday by the Federal Statistical Office shows Germany’s gross domestic product, or GDP, down by 0.3% in the period from January to March.
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This follows a drop of 0.5% in Europe’s biggest economy during the last quarter of 2022. Two consecutive quarters of decline constitute a technical recession. The figures are a blow to the German government, which last month boldly doubled its growth forecast for this year after a feared winter energy crunch failed to materialize. It said GDP will grow by 0.4% — up from a 0.2% expansion predicted in late January — a forecast that may now need to be revised downward.
Economists said high inflation hit consumer spending, with prices in April 7.2% 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 doesn’t distinguish between types of spending.
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