Germany falls into recession in first quarter

Persistent inflation has helped push Germany into recession in the first three months of the year, data shows.


Europe’s largest economy was also badly affected when Russian gas supplies dried up after the invasion of Ukraine, analysts said.


The economy contracted by 0.3% between January and March, the statistics office said.


That followed a 0.5% contraction in the last three months of last year.


A country is deemed to be in recession when its economy shrinks for two consecutive three-month periods, or quarters.


“Under the weight of immense inflation, the German consumer has fallen to his knees, dragging the entire economy down with him,” said Andreas Scheuerle, an analyst at DekaBank.


Germany’s inflation rate stood at 7.2% in April, above the euro area’s average but below the UK’s 8.7%.


Higher prices have weighed on household spending on things such as food, clothing and furniture. Industrial orders are also weaker, reflecting the impact of higher energy prices on businesses.


Government spending was 4.9% lower, and car sales also fell after government grants for electric and hybrid cars were scaled back.


The recession was less severe than some had predicted, given Germany’s heavy reliance on Russian energy. A mild winter and the reopening of China’s economy, helped ease the impact of higher energy prices.

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