German economy enters recession following bleak first quarter

Behind the fall was a plunge in government expenditure and a decline in household spending as elevated prices weighed on consumers

The result is a setback for Germany, which despite escaping the bleakest scenarios feared in the aftermath of Russia’s invasion has nevertheless succumbed to a recession that Chancellor Olaf Scholz appeared to rule out in January. (AP Photo/Markus Schreiber)

The German economy contracted slightly in the first quarter of 2023 compared with the previous three months, thereby entering a recession, data from the statistics office showed on Thursday.

Gross domestic product fell by 0.3% for the quarter when adjusted for price and calendar effects, the data showed. This follows a decline of 0.5% in the fourth quarter of 2022. A recession is commonly defined as two successive quarters of contraction.