2023.08.2508:01:00UTC+00German Economy Stabilizes As Estimated In Q2

Germany's economy stabilized as estimated in the second quarter as weak foreign demand offset the strength in government spending and investment, latest data from Destatis showed Friday.

Gross domestic product posted nil growth in the second quarter after a 0.1 percent fall in the first quarter and a 0.4 percent decline in the fourth quarter of 2022.

With the latest flat growth, the biggest euro area economy ended a short period of recession.

The statistical office confirmed the preliminary estimate published on July 28.

"After slight declines in the previous two quarters, the German economy stabilized in spring," Destatis President Ruth Brand said.

"We continue to see the German economy being stuck in the twilight zone between stagnation and recession," ING economist Carsten Brzeski said.

In the latest World Economic Outlook, the International Monetary Fund projected the German economy to shrink 0.3 percent this year before rebounding 1.3 percent in 2024.

On a yearly basis, the price-adjusted GDP dropped 0.6 percent in contrast to the 0.1 percent rise a quarter ago. Calendar-adjusted GDP fell 0.2 percent, the same rate of decline as reported in the first quarter.

Both price-adjusted and calendar-adjusted growth figures were confirmed. The expenditure-side of GDP showed that household spending remained unchanged in the second quarter and government spending rebounded 0.1 percent following a 1.9 percent fall a quarter ago.

Gross fixed capital formation gained 2.1 percent, reversing a 1.7 percent fall in the preceding period.

Data showed that exports slid 1.1 percent, offsetting the 0.4 percent rise in the first quarter. By contrast, imports stabilized after a 1.5 percent decrease.