Germany officially enters recession
STORY: Wary shoppers have helped put Germany into recession.
Revised figures out Thursday (May 25) showed the country’s economy contracted 0.3% over the first quarter.
That follows a 0.5% fall in the previous three months, making two straight quarters of contraction - the usual definition of a recession.
Household spending was one big factor.
It was down 1.2% over the period as consumers felt the effects of inflation.
Government spending also fell sharply, down almost 5%.
Those negatives swamped gains in investment, industrial activity and exports.
Now the question is whether there will be any recovery in the second half of the year.
One economist told Reuters that earlier optimism was starting to fade.
Concerns include a drop in purchasing power due to inflation, thinned out industrial order books, and the aggressive rate hikes by the European Central Bank.
There’s also uncertainty over recoveries in the U.S. and China, which could hit exports.