{"id":14898,"date":"2025-08-22T09:07:29","date_gmt":"2025-08-22T09:07:29","guid":{"rendered":"https:\/\/infundpros.com\/?p=14898"},"modified":"2025-08-22T09:07:30","modified_gmt":"2025-08-22T09:07:30","slug":"germany-falls-back-into-recessionary-territory-as-second-quarter-gdp-revised-down","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=14898","title":{"rendered":"Germany falls back into \u2018recessionary territory\u2019 as second-quarter GDP revised down"},"content":{"rendered":"<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Simply sign up to the <!-- -->German economy<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=a4d2660f-311f-4281-895c-c95274234a7f&amp;concept-id=3152dab4-adeb-472e-b307-b0a2187f0701\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Germany\u2019s economy shrank by 0.3 per cent in the second quarter, a sharper contraction than previously estimated, according to official data published on Friday.<\/p>\n<p>A flash estimate in July had originally pointed to a contraction of 0.1 per cent\u00a0in the April to July period. Friday\u2019s revision reflects a deeper slump in manufacturing and investment than initially thought.<\/p>\n<p>Germany was pushed back \u201cinto recessionary territory\u201d, Carsten Brzeski, ING\u2019s global head of macro, wrote in a note after Friday\u2019s release. \u201cIt looks increasingly unlikely that any substantial recovery will materialise before 2026.\u201d<\/p>\n<p>German GDP has contracted in six of the past 10 quarters and is hovering at its 2019 level. The second-quarter drop \u2014 the largest in a year \u2014 offsets a better than expected performance in the first three months, when Europe\u2019s biggest economy grew 0.3 per cent as exports to the US surged in anticipation of tariffs by US President Donald Trump.<\/p>\n<p>Chancellor Friedrich Merz has loosened Germany\u2019s strict debt brake and promised to embark on a \u20ac1tn debt-funded investment spree over the coming years, with economists predicting that positive growth effects will become visible next year.<\/p>\n<p>German growth will pick up over \u201cthe coming quarters\u201d, said Ralph Solveen, economist at Commerzbank. He pointed to positive effects from lower European Central Bank interest rates, which were halved to 2 per cent over the past 12 months, and Germany\u2019s coming fiscal expansion. But he also warned that the recovery was likely to be \u201cvery modest\u201d.<\/p>\n<p>Following the US-EU trade deal agreed in late July, traders have scaled back their expectations for further rate cuts by the ECB this year. They are now pricing in a probability of less than 50 per cent for another quarter-point reduction by December.<\/p>\n<p>ECB president Christine Lagarde warned on Wednesday that the boost at the start of the year from companies rushing out exports to get ahead of US tariffs was \u201cnow reversing\u201d. \u201cThe expected slowdown in euro area growth was already evident in the second quarter of this year,\u201d she said at a panel discussion in Geneva.<\/p>\n<p>Germany\u2019s exports of goods fell 0.6 per cent in the second quarter. Capital goods investments dropped 1.9 per cent, partly driven by a sharp decline in corporate vehicle purchases. Construction was down 2.1 per cent. The slump was partly offset by a 0.8 per cent increase in government consumption and a 0.1 per cent rise in private consumption.<\/p>\n<p>\u201cThe fall in investment was much stronger than we anticipated,\u201d said Melanie Debono, an analyst at Pantheon Macroeconomics.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/a4d2660f-311f-4281-895c-c95274234a7f\" target=\"_blank\" rel=\"noopener\" rel=\"nofollow\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay informed with free updates Simply sign up to the German economy myFT Digest &#8212; delivered directly to your inbox. Germany\u2019s economy&#8230;<\/p>\n","protected":false},"author":1,"featured_media":14899,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-14898","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Germany falls back into \u2018recessionary territory\u2019 as second-quarter GDP revised down | inFundPros<\/title>\n<meta name=\"description\" content=\"Stay informed with free updatesSimply sign up to the German economy myFT Digest -- delivered directly to your inbox.Germany\u2019s economy shrank by 0.3 per\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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