2024-07-30 10:53:44
The German economy is once again experiencing a slight decline. Experts are warning of a recession.
The German economy experienced a slight setback from April to June. Gross domestic product (GDP) fell by 0.1 percent compared to the previous quarter, the Federal Statistical Office announced in an initial estimate on Tuesday. In the first quarter, however, a minimal increase of 0.2 percent was achieved.
The main reasons for the decline include falling investments in equipment and construction. This is according to data from the statistics office. In the second quarter, there was still a price increase of 0.3 percent compared to the same period last year.
The unexpected decline in gross domestic product shows once again that there can be no talk of a significant upturn in Germany, wrote Commerzbank chief economist Jörg Krämer. “The threefold decline in the Ifo business climate and the weakness of the other economic indicators suggest at best anemic growth for the second half of the year.” The ebbing burden of the recent interest rate and energy price increases has so far barely been reflected in an economic recovery.
The fact that the German economy is not gaining momentum is due, among other things, to global factors. Above all, China, which has been the driver of growth on the world markets up to now, is showing weaknesses and has lost momentum. Nationally, there has also been an increase in company bankruptcies, which is putting additional pressure on the already ailing economic situation.
The European Central Bank’s (ECB) most recent interest rate cut in June of this year has not yet resulted in a noticeable upturn for the German economy. Even though this measure is fundamentally intended to stimulate investment and thus promote economic growth, it has not yet had any concrete effects. A rapid improvement in the situation therefore seems unlikely for the time being.