The German the economy contracted at the fastest rate since the global financial crisis of 2008-09, in the first quarter, as the nationwide lockdown to contain the corona virus spread has weighed on consumption and overseas demand, pushing the economy into a recession.
The gross domestic product fell by 2.2% sequentially, which was the biggest fall since the first quarter of 2009, preliminary data from Destatis revealed Friday.
It was also the second largest decline since German unification. The rate of GDP came in line with economists ‘ expectations.
The stagnation in the fourth quarter was revised to show a 0.1% contraction.
Two consecutive quarters, or the contraction indicates that the largest economy of the euro area has entered a technical recession.
The bureau of statistics is forecasting a 10% contraction of the economy in the second quarter.
On an annual basis, the GDP declined by a calendar adjusted 2.3% in the first quarter, compared to a 0.4% increase in the fourth quarter. Detailed GDP data is due on May 25.
The Price-adjusted GDP fell by 1.9% per year, in contrast to a 0.2% increase observed in the fourth quarter. Economists had forecast a 1.6 per cent fall.
Household final consumption expenditure have declined, and gross fixed capital formation in machinery and equipment, decreased considerably compared to the previous quarter.
However, the final consumption expenditure of general government, and gross fixed capital formation in construction had a stabilizing effect, and to avoid a greater decrease in the GDP.
During this time, both exports and imports recorded a sharp decline in the fourth quarter.
Although the economy has registered a significant contraction, the Germany much better than France and Italy, where GDP fell 5.8% and 4.7%, respectively, in the first quarter.
In addition, the data showed that the German employment rose by 147,000, or 0.3 percent in the first quarter of last year. However, with a small annual increase, the latter reported in the second quarter of 2010.
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