The German economy has entered a recession, after contracting by 0.3% in the first quarter of 2023. According to the German statistics office Destatis, household expenditure was squeezed by high inflation, leading to a decrease in the purchase of new cars and spending on food and beverages, clothing and footwear. The government has predicted the economy to expand by 0.4% this year. The contraction of 0.5% compared to the same period a year earlier, on a price and calendar adjusted basis, was weaker than the forecast by economists. This marks the second quarter of negative growth, officially entering a recession.
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