The German economy is in recession after shrinking in the last two quarters, according to government figures
Germany is Europe’s largest economy and an important “locomotive” for development in a number of other countries in the EU area. One has become accustomed to mostly recording steady growth in the German economy.
But now the picture is a little less bright.
Germany’s gross domestic product fell in the first quarter of the year, by 0.3 per cent, according to the central statistical agency Destatis.
NTB reports on the case.
In the fourth quarter of last year, the decline was 0.5 per cent, putting Europe’s largest economy in what is defined as a recession.
A recession occurs when there is an economic decline for two quarters in a row.
Germany, like many other European countries, has experienced significant inflation in the past year. But price growth is said to be on the way down.
In April, inflation was 7.2 per cent, while it was 7.4 per cent the month before. The peak was reached in October last year, when inflation was 8.8 per cent.
If one is to look for positive signs in this picture, it is that the decline has reduced and that inflation has fallen somewhat. The negative indicators are showing less negative.
Authorities are showing a certain optimism, they estimated last month that the country’s economy would grow by 0.4 per cent this year, while the forecast in January was for 0.2 per cent growth.
By all accounts Germany will continue to struggle with the self-inflicted burdens of the so-called green shift, where profitable and stable energy sources (coal, oil/gas and nuclear power) are systematically replaced by expensive and unreliable alternatives such as wind power. It is certainly a dubious recipe for growth in the economy.
The same can be said about the plans to replace Germany’s large car fleet with electric cars. Taking into account all that is required in terms of costs in charging infrastructure and other things.
A third element that will disrupt the German economy both today and for the foreseeable future is the economic burden of the enormous immigration the country has seen, largely of people from the Third World.
When a nation has to feed and care for millions upon millions of people who do not get to work, it can make even the strongest economy falter.