The German economy shows little sign of emerging from stagnation after shrinking by 0.1 per cent in the second quarter compared to the first three months of the year.
Confirming prior estimates, Germany’s statistics office said on Tuesday that the country’s economy ‘cooled down again in spring’ following first quarter growth of 0.2 per cent.
It marks the latest in a spate of disappointing updates from the eurozone’s largest economy, which has lagged peers in the bloc after contracting last year and is one more poor quarter away from a recession.
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Officials said sluggish private consumption and a drop in industrial investment had weighed on German GDP in the second quarter, while exports were hit by weak foreign trade.
These issues will be familiar to policymakers, who have battled high inflation, an industrial slowdown and cooling export demand for some time.
It was revealed last week that German business activity contracted in August for the second month in a row, while separate data from the closely-watched Ifo Business Climate Index showed growing private sector pessimism in the country.
Global head of macro at ING bank Carsten Brzeski said: ‘There is still no recovery in sight.
‘With disappointing second-quarter growth and almost all confidence sentiment indicators pointing south, the German economy is currently back where it was a year ago: stuck in stagnation as the growth laggard of the entire eurozone.’
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