German economy enters recession

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Consumer spending declined in Germany. Associated Press/Photo by Michael Sohn

Germany’s gross domestic product fell during the last quarter of 2022 and the first quarter of 2023, according to a Thursday report from the country’s Federal Statistics Office. One rule-of-thumb for a recession is a country experiencing two consecutive quarters of declining output. Household and government spending in Germany dropped during the first quarter of this year and the annual inflation rate was 7.2 percent in April. The International Monetary Fund predicted that the country’s economy will shrink by 0.1 percent this year.

What contributed to the recession? Energy prices rose across Europe this winter after Russia closed the Nord Stream 1 natural gas pipeline. Germany obtained more than half of its natural gas from Russia before it invaded Ukraine in February 2022. Natural gas prices dropped this quarter and the German national bank said the economy could see modest growth.

Dig deeper: Read Jerry Bowyer’s column in WORLD Opinions about investors’ no-confidence vote in the U.S. economy for 2023.

Lauren Canterberry

Lauren Canterberry is a reporter for WORLD. She graduated from the World Journalism Institute and the University of Georgia with a degree in journalism, both in 2017. She worked as a local reporter in Texas and now lives in Georgia with her husband.