The German statistical office surprisingly announced on Thursday that Germany’s gross domestic product also fell by 0.3 percent in the first quarter of this year, which means that the German economy is in a technical recession.
A 0.5% decrease was also detected in the last quarter of the previous year. The causes are inflation, rising food prices and of energy products and, as a result, lower private and state spending.
The news about the technical recession of the German economy in the first three months of this year, however, came as a surprise. The main reasons for the contraction of the German economy for two quarters in a row are inflation and rapid rise in food prices and energy products, both of which have been holding back economic growth for some time.
Marcel Fratzscherpresident of the German Institute for Economic Research, said of the seriousness of the situation for ZDF: “On the one hand, it is not as bad as we feared half a year ago, even last summer it was predicted that after the Russian stoppage of gas, the recession would be minus 4-5%, now it is minus 0.3%, but this is by a lot people dramatically Many people have significantly less money due to inflation, and this is the reason for the serious economic situation – that private consumption has decreased, as many people have had to limit their spending.”
German chancellor Olaf Scholz is nevertheless optimistic: “The outlook for the German economy is very good and we solve the challenges we face.”
Economist Marcel Fratscher also said that the state’s abundant financial aid helped, but that in the future it should be more targeted at the population with lower incomes. He predicts that the recovery of the German economy will be weak in the next few years, that GDP will be low and high inflation realitywhich will accompany Germany for several more years, and that purchasing power will return only in four to five years. It is positive that, statistically, there have been more investments this year, exports have increased again, which is important for the German economy, but at the same time, export prospects have worsened in the long term.