<figure id="attachment_3044903" aria-describedby="caption-attachment-3044903" style="width: 1600px" class="wp-caption alignnone"><img loading="lazy" class="size-full wp-image-3044903" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/04/59a3b3bc-european-central-bank.jpg" alt="European Central Bank" width="1600" height="1000" /><figcaption id="caption-attachment-3044903" class="wp-caption-text">Germany’s shrinking economy signals deeper challenges for Europe’s largest economy, following years of stagnation and weak growth. (EPA Images pic)</figcaption></figure>
FRANKFURT: Germany&#8217;s economy shrank in the second quarter by even more than had been feared, official data showed Friday, in a further bad sign for Europe&#8217;s top economy after years of stagnation.
Gross domestic product (GDP) fell 0.3% from the previous quarter, federal statistics agency Destatis said, as it revised down an earlier July estimate of a drop of just 0.1%.
Household consumption came out lower than initial data had suggested, Destatis said, while the manufacturing and construction sectors had also performed worse than expected.
Goods exports fell 0.6% on the previous quarter, and spending on machinery and equipment fell 1.9%, underlying the difficulties faced by the country&#8217;s manufacturers.
Shock data released earlier in August showed that German industrial production had in June plunged to its lowest level since the pandemic in 2020.
ING bank analyst Carsten Brzeski said tariffs imposed by US President Donald Trump combined with the euro strengthening against the dollar made it &#8220;hard to see&#8221; how Germany&#8217;s export-dependent economy could recover soon.
&#8220;The German economy has made itself too comfortable in stagnation, and it could take until next year before a more substantial recovery starts to unfold,&#8221; he said.
The German economy has struggled in recent years, hit by high production and energy costs at home as well as increasingly fierce Chinese competition abroad for key exports such as cars and machinery.
In July, Destatis said that German GDP fell 0.9% in 2023 and 0.5% in 2024, saying the contraction in those years was even worse than previously reported.

MatchPoint Times

German GDP growth revised down in new blow to economy

The country’s statistics agency reported GDP fell 0.3% in the last quarter, worse than the initial July estimate of 0.1%.

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