German economy shrinks by 0.3% in Q1 of FY 2023, country enters recession

Year-on-year, GDP fell by 0.5% when adjusted for price and calendar effects.

Edited By Saurav Mukherjee (with inputs from Reuters)
Updated25 May 2023, 02:57 PM IST
Representative image | Figures of businessmen are skeptical looking at stock market charts.
Representative image | Figures of businessmen are skeptical looking at stock market charts.

In the first quarter of 2023, the German economy contracted by 0.3 percent compared with the previous three months and entered recession, data from the statistics office showed on May 25.

Germany's gross domestic product plunged by 0.3% for the quarter when adjusted for price and calendar effects, a second estimate showed. In the previous quarter, the GDP declined by 0.5 percent in the fourth quarter of 2022.

Year-on-year, GDP fell by 0.5% when adjusted for price and calendar effects.

"Under the weight of immense inflation, the German consumer has fallen to his knees, dragging the entire economy down with him," Andreas Scheuerle, an analyst at DekaBank, said.

Apart from this the household consumption was down 1.2% quarter-on-quarter after price, seasonal and calendar adjustments, while the government spending also decreased significantly by 4.9% on the quarter.

"The warm winter weather, a rebound in industrial activity, helped by the Chinese reopening, and an easing of supply chain frictions, were not enough to get the economy out of the recessionary danger zone," ING's global head of macro Carsten Brzeski said.

However, the investment was up in the first three months of the year, following a weak second half of 2022. Investment in machinery and equipment increased by 3.2% compared with the previous quarter, while investment in construction went up 3.9% on quarter.

There were also positive contributions from trade. Exports rose 0.4%, while imports fell 0.9%.

"The massive rise in energy prices took its toll in the winter half-year," Commerzbank's chief economist Joerg Kraemer said.

"Looking beyond the first quarter, the optimism at the start of the year seems to have given way to more of a sense of reality," ING's Brzeski said.

Meanwhile, the German Bundesbank expects the economy to grow modestly in the second quarter as a rebound in industry more than offsets stagnating household consumption and a slump in construction, according to a monthly economy report published on Wednesday.

With agency inputs.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
First Published:25 May 2023, 02:57 PM IST
HomeEconomyGerman economy shrinks by 0.3% in Q1 of FY 2023, country enters recession

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Bharat Electronics

    312.60
    03:59 PM | 22 JUL 2024
    6.3 (2.06%)

    Zee Entertainment Enterprises

    134.60
    03:59 PM | 22 JUL 2024
    -2.95 (-2.14%)

    Tata Steel

    160.35
    03:57 PM | 22 JUL 2024
    2.6 (1.65%)

    Wipro

    505.75
    03:59 PM | 22 JUL 2024
    -51.5 (-9.24%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Rashtriya Chemicals & Fertil

    235.05
    03:53 PM | 22 JUL 2024
    21.1 (9.86%)

    NBCC India

    184.85
    03:52 PM | 22 JUL 2024
    13.05 (7.6%)

    Indian Hotels Company

    620.20
    03:54 PM | 22 JUL 2024
    42.95 (7.44%)

    Chalet Hotels

    820.00
    03:29 PM | 22 JUL 2024
    55.9 (7.32%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      75,510.00293.00
      Chennai
      75,657.000.00
      Delhi
      75,217.00732.00
      Kolkata
      75,144.00659.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.98/L0.23
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00
      OPEN IN APP
      HomeMarketsPremiumInstant LoanBudget