Experts warn that Germany is in recession after unexpectedly falling at the end of last year, according to official data.
According to preliminary data from Destatis, Europe’s largest economy, the decline was 0.2pc in the three months ending December. This is according to some economists who interpret it as evidence that the country experienced a mild recession during the winter.
This downturn occurs less than two weeks after Olaf Scholz, the German chancellor, said that Germany would avoid a recession.
Two consecutive quarters of contraction are considered a technical recession.
Franziska Palmas (capital Economics senior Europe economist) said that the data “pour cold water on the recent optimism regarding the prospects for the eurozone”.
She said that a German technical recession “now appears quite probable, especially as the drag of higher interest rates will intensify over the coming months”.
At the World Economic Forum in Davos, Mr Scholz stated that Germany would avoid a recession this calendar year despite its current energy crisis.
Mr Scholz stated that the new terminals for liquefied natural gases (LNG), on the Baltic and North Sea coasts, would help to cushion the impact of the energy crisis on Germany’s critical manufacturing sector.
