Inflation and Consumer Spending Push Germany into Recession
TL;DR Summary
Germany has fallen into recession due to a decline in consumer spending caused by last year's energy price shock. The country's GDP dropped 0.3% in the first quarter of 2023, following a 0.5% contraction at the end of 2022. The high price increases continued to burden the German economy, particularly reflected in household final consumption expenditure, which was down 1.2% in Q1. However, timelier survey data showed earlier this week that business activity in the country expanded again in May, despite a sharp downturn in manufacturing.
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