Germany's Economy Enters Recession as Inflation Curbs Consumer Spending

Germany's economy shrank for a second straight quarter, entering a technical recession due to inflation reducing consumer spending.
Germany's GDP fell 0.3% in the first quarter of 2023 after contracting 0.5% in the fourth quarter of 2022.
High inflation caused German consumers to cut back spending, with household consumption dropping 1.2% in the first quarter.
Although business investment rose and employment increased slightly, weak manufacturing and exports weighed on the economy.
The European Commission predicts weak growth in Germany this year, with risks of a prolonged downturn due to declining purchasing power, higher interest rates, and slowing global trade.