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Germany GDP Q1 2023

Germany: Revised GDP figures show economy entered technical recession in Q1

The statistical office revised down GDP growth in the first quarter to minus 0.3% seasonally adjusted quarter on quarter (preliminary reading: 0.0% s.a. qoq; Q4 2022: -0.5% s.a. qoq). The downward revision means the economy entered a technical recession in Q1.

Household spending contracted at a more moderate pace of 1.2% seasonally adjusted quarter-on-quarter in Q1 compared to a 1.7% contraction in Q4. Public consumption, meanwhile, contracted at a more pronounced rate of 4.9% in Q1 (Q4 2022: +0.2% s.a. qoq). Additionally, fixed investment growth hit an over two-year high of 3.0% in the first quarter (Q4: -2.6% s.a. qoq).

Exports of goods and services bounced back, growing 0.4% in Q1 (Q4 2022: -1.3% s.a. qoq). In addition, imports of goods and services contracted at a milder rate of 0.9% in Q1 (Q4 2022: -2.4% s.a. qoq).

On an annual basis, economic activity contracted 0.2% in Q1, contrasting the previous period’s 0.2% growth. Q1’s reading marked the largest contraction since Q1 2021.

Looking ahead, 23 of the 28 panelists polled by FocusEconomics expect the economy to rebound in Q2. Private consumption should contract at a softer pace than in the prior quarter, with red-hot inflation cooling gradually.

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