European Politics > Germany into Recession, Europe very close behind. Is proxy war in Ukraine responsible?

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Germany slides into recession as consumer, government spending falls

By Paul Godfrey

 

Germany's economy is officially in recession, according to first quarter growth figures published by the Federal Statistical Office on Thursday. File photo by Hayoung Jeon/EPA-EPE

May 25 (UPI) -- Germany's economy contracted for the second-straight quarter in the January to March period, meaning the world's fourth-largest economy officially meets one definition of a recession, figures published Thursday by the country's main statistical agency show.

Gross Domestic Product unexpectedly declined by 0.3% in the first quarter on top of a 0.5% fall in the fourth quarter of 2022, according to the latest economic report from Destatis, the Federal Statistical Office, which said economic performance had been hit by the impact of high prices on consumer spending and sharp government cuts.

"After GDP growth entered negative territory at the end of 2022, the German economy has now recorded two consecutive negative quarters," said Ruth Brand, President of Destatis, which as recently as last month had forecast that first quarter growth would be flat, avoiding a recession.

An adjusted 1.2% fall in household expenditure in the quarter under the burden of continuing high prices weighed on the economy with people cutting back spending on food and drink, clothing and footwear, and furniture compared with the October to December.

Spain's economy grew by 3.8%, Ireland's by 2.6% and Portugal saw a rise of 2.5%. By contrast, Germany's economy continued to contract with GDP falling into the red by 0.1% after three consecutive quarterly declines in 2022.

Does it make sense that these three countries are the least affected by the sanctions against Russian gas flowing into Europe?

Taken with the last quarterly figures in January which showed eurozone GDP stuttered, slowing to 0.1% in the October to December period due to contracting economies in almost a third of the countries that use the Euro, the outlook is somber.

So, Europe's 0.1% growth in the last two quarters is just a whisper above a continental recession. Such is the price for NATO & America's proxy war in Ukraine.