Brandenburg Gate in Berlin, Germany

Germany GDP Q2 2023

Germany: Economy flatlines in Q2 after winter recession

GDP flatlined on a seasonally adjusted quarter-on-quarter basis in Q2, above the 0.1% contraction that brought the economy into a technical recession in Q1. On an annual basis, economic activity contracted 0.6% in Q2, contrasting the previous period’s 0.1% expansion.

The slightly stronger reading was driven by total consumption: Private consumption was stable in the second quarter, which was above the first quarter’s 0.3% contraction, while government consumption rebounded, growing 0.1% in Q2 (Q1: -1.9% s.a. qoq).

Less positively, fixed investment growth moderated to 0.4% in Q2 from 1.7% in the previous quarter. In addition, exports of goods and services contracted 1.1% in Q2, marking the worst reading since Q2 2020 (Q1: +0.4% s.a. qoq). Meanwhile, imports of goods and services flatlined in Q2 (Q1: -1.5% s.a. qoq).

Looking ahead, the Consensus is for the economy contract slightly in Q3, weighed down by low consumer confidence, high interest rates and a slow Chinese economy.

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