Germany contracted 0.3% and entered a technical recession

The German economy contracted 0.3% in the first quarter, according to definitive data published today by the German federal statistics agency (Destatis), which means that it has entered a technical recession after two consecutive negative quarters.

These figures correct the provisional figures previously released by the department, which pointed to a stagnation of the Gross Domestic Product (GDP) between January and March 2023, after the 0.5% drop recorded in the last quarter of 2022.

“After the contraction reflected at the end of 2022, another negative quarter was recorded”, said the president of Destatis, Ruth Brand, in a statement.

The GDP contraction results from the fall in consumption due to inflation which, despite having started to be contained, after having reached a peak of more than 10% in October, stood at 7.2% in year-on-year terms in April.

However, there were positive impulses in exports and investment, as well as a recovery in the construction and industrial equipment sector, in the production of machinery, household appliances and cars.

Thus, exports as a whole increased by 0.4% in this first quarter compared to the last quarter of 2022.

Imports, on the other hand, fell by 0.9%, according to detailed data from Destatis, which highlight the drop experienced in fuels, minerals and chemical products.

Employment also increased, reaching 45.6 million people working, a year-on-year increase of 446,000 citizens or, in percentage terms, 1.0%.

According to these data, which corroborate the trend of the German federal employment agency, the rate of job growth continues to accelerate.