Germany, the world’s fourth largest economy, entered recession as its Gross Domestic Product (GDP) fell 0.3 per cent in the first quarter of 2023.
- This follows a decline of 0.5 per cent in the fourth quarter of the last year, effectively pushing the country into a recession.
- Germany’s economy minister Robert Habeck blamed the country’s previous high dependency on Russian gas for the prevailing economic crisis.
- Two consecutive quarters of negative growth is what is defined as recession.
- The development is a massive blow to the German govt, which only last month doubled its growth forecast for the year to 0.4% from 0.2%.
- A recession marks a downturn when, for example, production capacities are no longer being utilized because exports are falling and demand for goods and services is shrinking at home.
