Germany's GDP shrinks unexpectedly

Contrary to expectations, the German economy for the second quarter of 2024 contracted 0.1% from the previous fiscal year, reversed from a 0.2% increase in the first 3 months of the year, and was compared to the 0.1% increase forecast.

As the industrial sector continues to be particularly affected by high interest rates, investment in equipment and buildings declined in particular.

There was also a 0.1% decrease compared to the same period last year, and it was revised downward from the 0.1% decrease in the previous fiscal year, resulting in negative growth for 5 consecutive quarters.

The European Commission expects the German economy to grow by 0.1% in 2024 and recover from a 0.3% contraction in 2023.

Meanwhile, investment continues to be held back by high financing costs, and exports are expected to continue to slump.

Source: Federal Statistical Office