x

WORLD

Germany Economy Shrinks in First Quarter, Signaling One Definition of Recession

BERLIN (AP) — The German economy shrank unexpectedly in the first three months of this year, marking the second quarter of contraction that is one definition of recession.

Data released Thursday by the Federal Statistical Office shows Germany’s gross domestic product, or GDP, declined by 0.3% in the period from January to March. This follows a drop of 0.5% in Europe’s biggest economy during the last quarter of 2022.

Two consecutive quarters of contraction is a common definition of recession, though economists on the euro area business cycle dating committee use a broader set of data, including employment figures. Germany is one of the 20 countries that use the euro currency.

Employment in the country rose in the first quarter and inflation has eased, but higher interest rates will keep weighing on spending and investment, said Franziska Palmas, senior Europe economist for Capital Economics.

“Germany has experienced a technical recession and has been by far the worst performer among major eurozone economies over the past two quarters,” Palmas said, predicting further weakness ahead.

The figures are a blow to the German government, which last month boldly doubled its growth forecast for this year after a feared winter energy crunch failed to materialize. It said the economy would grow by 0.4% — up from a 0.2% expansion predicted in late January — a forecast that may now need to be revised downward.

Economists said high inflation hit consumer spending, with prices in April 7.2% higher than a year ago.

GDP — the broadest gauge of economic output — reflects the total value of goods and services produced in a country. Some experts question whether the figure alone is a useful indicator of economic prosperity given that it doesn’t distinguish between types of spending.

As a whole, the eurozone economy scraped out meager growth of 0.1% in the first quarter, according to initial estimates, with inflation eroding people’s willingness to spend as their pay fails to keep pace.

The U.S. also reported disappointing growth estimates Thursday that kept alive fears of a recession in the world’s largest economy.

The International Monetary Fund predicted this week that the United Kingdom would avoid falling into recession this year after previously expecting it to perform the worst among the Group of Seven leading industrial nations.

IMF Managing Director Kristalina Georgieva said Tuesday that “we’re likely to see the U.K. performing better than Germany, for example.”

RELATED

TORONTO  — A man and woman were shot to death and a male suspected as the attacker also died Monday at a north Toronto office space near a daycare center and a school, authorities said.

Top Stories

Columnists

A pregnant woman was driving in the HOV lane near Dallas.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.

Video

1 of 2 Abducted Louisiana Children is Found Dead in Mississippi after Their Mother is Killed

JACKSON, Miss. (AP) — A Louisiana woman was found dead in her home Thursday, and her two young daughters were abducted and found hours later in Mississippi — one dead and the other alive, police said.

ROME (AP) — Sixty-four people were missing in the Mediterranean Sea and several were rescued after their ship wrecked off Italy's southern coast Monday, United Nations' agencies said in a statement.

WASHINGTON (AP) — President Joe Biden is taking an expansive, election-year step to offer relief to potentially hundreds of thousands of immigrants without legal status in the U.

NEW YORK – Constantine Iordanou, the well-known Cypriot businessman, passed away on June 16 due to a heart attack.

TAMPA, Florida - The New York Post article by David Propper begins thusly: “Christos Alexander Themelis Jr.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. [email protected]

You may unsubscribe at any time using the link in our newsletter.